The commodity price index of The Bank of Nova Scotia dropped 5.9% in April from the previous month. The oil sector picked up but was more than offset by falling forest product and metal and mineral sub-indexes and by some easing in agricultural prices.
The metal and mineral sub-index fell 2.2% from March. Compared with the same period a year ago, the sub-index was ahead 5.1%.
Economist Patricia Mohr notes that metals and lumber prices, which dropped temporarily in reaction to tighter U.S. monetary policy, rebounded in May. “U.S. funds are again making heavy investments in base metals, anticipating a turnaround in global consumption,” she writes.
Copper prices surged to US$1 per lb. in late May from US85 cents in April. Mohr says strong U.S. copper demand encouraged shipments from European warehouses to the U.S., contributing to a 35% decline, since last December, in inventories on the London Metal Exchange. Also showing some strength was nickel, which reached US$2.84 per lb. in late May.
The all-commodity index tracks export prices of various Canadian commodities, which are weighted according to their 1984 export values (except crude oil, for which the value of net exports is used).
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