Commodity Prices Edge Down in June: Scotiabank

TORONTO, ON--(Marketwired - July 29, 2014) - 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)."

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 U.S. -- with exports continuing to climb -- but a dwindling surplus on refined petroleum products and stepped-up imports of U.S. pentanes-plus to flow bitumen through pipelines have pared the net gains in Canada's merchandise trade since 2013; and

• 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.

Read the full Scotiabank Commodity Price Index online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

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