An increase in metal and forest product prices offset declines in crude oil and agricultural prices during October and helped Scotiabank’s all-commodity price index advance by 0.9% from the previous month, turning around a 3-month decline.
The metals and minerals index rebounded in October (up 1.6% from September and 25% from the same month in 1987) with firmer copper, zinc and lead prices, bank economist Patricia Mohr reports. Brass mill demand for copper is strong in the United States, West Germany and Japan, she says.
Copper mines in the non- Communist world have been operating close to full capacity; straining the tight supply situation is a miners’ strike in Peru and production difficulties in North America and Zambia. The price of the metal has risen to new highs in both London and New York, with inventories going the other way.
Mohr says copper prices are expected to remain high in 1988. “Although additional production facilities will be brought on stream, supply disruptions linked to labor contract negotiations in Canada, the U.S. and Chile will keep supplies tight. Demand will be underpinned by an ongoing boom in business investment in the U.S., Japan and parts of western Europe,” she says.
The all-commodity index tracks export prices of a variety of Canadian commodities, which are weighed according to their 1984 export values.
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