At the end of April, Canada’s second-largest port, Montreal, was faced with a five-day strike by union workers. When coupled with higher demand as a result of improved pandemic conditions, the aftermath of the strike is still being felt across the container network. Vessel space is tight while cut-offs and ERD are moving targets, making it challenging to co-ordinate supply chain movements.
Large volumes of Twitch are exported from the Montreal region, driven largely by demand in South Korea and Hong Kong. Those container rates, like for many parts of the world, are shockingly high. Although material has been difficult to move on the east coast of Canada, buyers appear to be understanding of the situation and are open to extending contractual terms.
At the time of writing, reports estimate that over 50% of eligible Canadians are now fully vaccinated. Restrictions are easing for vaccinated travellers but retail capacity measures are still in effect at different levels across the provinces. Tourism spending, which represented more than 3% of GDP in 2020, was down to US$ 68 billion from US$ 105 billion in 2019; unfortunately, 2021 is on the same pace as 2020.
Regarding currency, one US dollar would have purchased just over 1.40 Canadian dollars in March 2020 - the latter’s lowest level to the greenback since 2004. Subsequently, it has been on a tear to new highs surpassing pre-pandemic levels and is currently at 1.25 Canadian dollars to the US dollar.
The Bank of Canada has announced that it will be easing bond purchases and is signalling a near-term interest rate hike. While strong oil prices play an important part in the Canadian economy, a stronger Canadian dollar normally puts pressure on its exports of goods. However, experts believe that a strong recovery of the US economy will offset this effect as the USA is Canada’s largest trading partner. Expectations for the Canadian dollar are that it will remain robust at least into 2022.
Labrador Recycling (CAN), Board Member of the BIR Non-Ferrous Metals Division