The gain (2.1%) in metal prices, the first since January, was more than offset by a large drop in grain prices and slight declines in oil and forest products.
Economist Patricia Mohr said the metal and mineral sub-index rebounded in August with temporary supply disruptions pushing up the prices of copper and zinc. By late September, those same prices had eased because of an end to the miners’ strike in Peru and a rise in LME stocks.
Copper at $1.27(US) per lb remains profitable; Mohr said break- even costs for Canadian copper producers are about 67 cents . Also, strong global business investment is underpinning demand for base metals, she said; during the first six months of 1989, capital spending advanced by 21% in Japan (compared with a 16% gain the previous year).
The all-commodity index tracks export prices of a variety of Canadian commodities, which are weighted according to their 1984 export values, except crude oil where the value of net exports is used.
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