Top 5 Exports: Canada
By Alex Brokaw Sep 11, 2012 3:35 pm
Crude oil, cars, gold, LPG, and coal top the list of Canada's biggest exports.
Liquefied Petroleum Gases
At $16.7 billion, exports of liquid petroleum gas ("LPG"), better known as propane, is nearly on par with gold exports. The LPG category, which includes numerous other forms of liquefied hydrocarbon gases -- including ethane, butane, and methane -- also known as liquid natural gas or LNG, is a profitable derivative products of the Canadian oil industry. Canada produced nearly 7 million cubic meters of propane in 2011, and it is the sixth largest propane producer in the world.
The latest statistics from Canada's Natural Energy Board show that of the 182.2 thousand barrels per day (b/d) in 2009, 82.6 thousand b/d were consumed domestically, and the remaining 100.3 thousand b/d were shipped to the United States (a small amount of imports make up for the discrepancy between total production and the distribution breakdown).
Canada is the world's third largest natural gas producer -- behind Russia and the United States -- with an average annual production of 6.4 trillion cubic feet. However, since production peaked in 2002, output has stumbled. It is believed that, in the face of low domestic prices and high production costs, the average daily yield is likely to be drop to the lowest level since 1993.
Still, yesterday, London-based BG Group (BG.L) announced plans to begin construction on an 850-kilometer pipeline, a key element of its proposed LNG export facility in Rupert Prince, British Columbia. Houston-based Spectra Energy (SE) will potentially partner with BG on building the pipeline. The move is part of the $20 billion expected to be spent in the next two to nine years opening up Canada's LNG supplies to Asian demand, which is expected to grow by 20% in the next four years, according to Keith Schaefer, writing for Seeking Alpha.
(Read more about liquid natural gas development in North America in China and Singapore Latest to Invest in US LNG Facility.)
Canada exports $8.7 billion worth of coal and solid fuels manufactured from coal, according to StatsCan. Canada holds the world's fifth largest natural reserve of coal -- behind Russia, the United States, China and Australia -- and at current levels of production, its reserves equate to roughly a 100-year supply, according to The Canadian Encyclopedia. At around 10 billion tons, Canadian reserves make up 4% of the world's natural reserves, and Canada exported nearly 33 million tons of its coal in 2010, 73% of which went to Asia.
Of the four companies responsible for nearly all of the coal production in Canada, three are domestic: Teck Resources (TCK), Walter Energy (WLT), and Grande Cache Coal (GCE.TO). The fourth is London-based Anglo American's (AAL.L) subsidiary Peace River Coal.
Yesterday, Walter Energy was up 6%, joining a number of coal producers up on the news that China plans to commit $156 billion to improving infrastructure. This comes after last week, when three investment banks, including Davenport & Co LLC, lowered coal projections for the fourth quarter of 2012, due to low demand in Europe and China.
More Top Exports From Canada
The list of Canada's biggest exports goes on to include: Potassic mineral and chemical fertilizers ($6.8 billion); aircrafts including airplanes, helicopters, and spacecrafts ($6.6 billion); unwrought aluminum ($6.5 billion); wheat ($5.7 billion); and lumber (5.4 billion).
No positions in stocks mentioned.
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