Metal prices boost index (December 26, 1994)

A surge in metals and forestry prices in October enabled the commodity price index of the Bank of Nova Scotia to advance by 1.6%.

The all-items index is now 11.8% higher than it was at this time last year. Economist Patricia Mohr says prices for base metals and pulp and paper continued to climb in November, driven by three factors: economic improvements within the Group of Seven industrialized nations; stronger residential construction in Japan, Germany and the United Kingdom; and widespread restocking, particularly in Europe, of many raw materials. The metals and minerals sub-index gained 3.3% from September and is ahead 32.1% from one year ago.

Advances in aluminum and molybdenum prices, in particular, have more than offset weaker gold prices, the latter having been dampened by increases in U.S. interest rates.

“Base metal prices will continue to rise through 1995, alongside tightening global supply-demand conditions,” Mohr says.

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).