Tuesday June 26, 10:14 am Eastern Time
Scotiabank Commodity Price Index advances in May as a result of surging lumber prices
biz.yahoo.com
TORONTO, June 26 /CNW/ - Scotiabank's Commodity Price Index, which measures price trends in Canada's major exports, rose by 1.3% in May to a level 4% above a year earlier. In May, the Forest Products Index jumped alongside surging U.S. prices for lumber and oriented strandboard (OSB) - propelled by aggressive U.S. monetary policy easing, strong U.S. housing starts and big market share gains for OSB vis-a-vis plywood. A moderate gain in the Metal & Mineral Index also helped to offset declines in the Oil & Gas and Agricultural Indices. Oil and natural gas inventories have returned to normal levels in the United States.
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The Forest Products Index strengthened in May as robust gains for wood products countered a further drop in pulp prices and slight declines in uncoated freesheet paper, supercalendered A paper and linerboard. Western Spruce-Pine-Fir 2x4 lumber prices climbed to a very lucrative US$375 per thousand board feet in late May from an average of US$249 in April and only US$181 in January.
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The Metal & Mineral Index rose in May as firmer prices for nickel, copper, aluminium, gold and uranium more than countered weaker prices for lead, zinc and cobalt. While gold remains at a slightly higher level than several months ago, base metal prices have drifted lower again in June.
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LME copper prices averaged US$0.75 per pound in April and US$0.76 in May, but have dropped to US$0.72 in late June - just above average Western World break-even costs including depreciation. Spot market prices for potash remain at US$122 per tonne at the Port of Vancouver for overseas sales - underpinned by supply cutbacks by Canadian producers. However, contract prices could edge down in the second half of the year due to reduced fertilizer application in East Asian markets such as Malaysia, linked in turn to soft palm oil markets.
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In contrast, the Canadian Wheat Board's asking export price for No.1 wheat rose from US$150 per tonne in April to US$155 in May, though prices have retreated again in late June. Global supply and demand projections continue to tighten, with the U.S. Department of Agriculture estimating a significant reduction in the U.S. winter wheat crop. Drought in China is also expected to dramatically reduce Chinese inventories and very dry growing conditions may take a toll on crop yields in Saskatchewan next Fall. |
