Coking coal supply may be under threat as union members representing Canadian Pacific 

Railway staff served a notice to go on strike Tuesday, the company confirmed. 

In  a  notice  filed  Friday,  unions  the Teamsters Canada Rail Conference-Train & Engine 

(TCRC) and the International Brotherhood of Electrical Workers (IBEW) issued a notice to 

CP of plans to strike Tuesday. 

"CP will continue to meet with the TCRC and the IBEW in the hopes of reaching agreements 

that  are  in  the  best  interests  of the entire CP family, its customers, shareholders and the 

broader North American economy," the rail company said in a statement. 

"CP has commenced its work stoppage contingency plan and will work closely with customers 

to ensure a smooth, efficient and safe wind down of operations." it said. 

Canada  is  the  third  largest  exporter  of  coking  coal  globally,  making up 9.8% of global 

seaborne coking coal exports at 28 million mt in 2017, according to a Goldman Sachs report 

released in February 2018. 

In  Canada,  Teck  -- which  uses  CP's railways  -- is the biggest coking coal miner, exporting 

premium and hard coking coals to US and Asian markets. 

The miner has not yet responded to S&P Global Platts requests for comments. 

Coking coal market sources said that the notice ensued after union members had their last 

contract offer rejected. 

This comes at a time when the industry is closely watching issues with Aurizon in Queensland 

Australia,  where  the  rail  company  is  threatening to cut its railed coal volumes by up to 20 

million mt in 2018. 

While Asian coking coal buyers said that they are watching the situation with concern, no one 

is rushing to buy spot yet. 

One Asian steelmaker buyer of Canadian coals said that he did not expect a long drawn-out 

strike, expecting the government to step in in such an event. 

He added that he is currently not worried about his coking coal supplies this month as there 

have been  excess  cargoes  in  the  market  for the May period, but expected that should 

Canadian coking coal supply be seriously affected, his supply would be tight the following 

month. 

He added that he is still awaiting information from the miner on more details. 

Another Northeast Asia steelmaker said the strike in Canada "is a rare case" and it is hard to 

say if the strike would eventually take place. 

He said it was too soon to assess what the impact might be, but added, "It's not the time to 

rush into [spot] procurement."