Commodity prices edge down in June: Scotiabank

TORONTO, Ont.–Scotiabank’s Commodity Price Index inched down by 0.7% month-over-month (m/m) in June, but has climbed 8.9% from last December’s low — led by stronger oil and gas prices.

“The Metal and Mineral sub-Index retreated in June, but will rally sharply in July amid a spurt in base metal prices and steadier gold prices,” said Patricia Mohr, Scotiabank’s Vice President of Economics and Commodity Market Specialist.

“Exuberance over a moderate pick-up in China’s economy in the second quarter partly accounts for the recent surge in investor interest in base metals, as does a second year of record global auto production, with strength in China (+9.7% YTD), North America (+4.3%) as well as Germany and Spain (+7.9% — the two biggest auto manufacturers in Western Europe),” she said.

Other highlights in the report include:

Spot uranium prices have likely touched bottom at US$28, given the draft approval by Japan’s Nuclear Regulation Authority of restarts at two nuclear reactors; however, high inventories in Japan and elsewhere may slow the price recovery;

Canada remains the top crude oil exporter to the US, with exports continuing to climb, but a dwindling surplus on refined petroleum products and stepped-up imports of US pentanes-plus to flow bitumen through pipelines have pared the net gains in Canada’s merchandise trade since 2013.

Aluminium prices, important to the economies of northern B.C. and Quebec (Rio Tinto-Alcan) — have recovered markedly from very depressed levels in early 2014.