Scotiabank's Commodity Price Index Loses Further Ground in September

TORONTO, Oct. 30, 2013 /CNW/ - Scotiabank's Commodity Price Index fell in September, declining 2.8% month over month (m/m) and 3.8% year over year (yr/yr). While the All Items Index will likely fall further over the balance of 2013, the correction in commodity prices, especially in metals and minerals, since April 2011 should be largely over by year-end.

"Traditionally, junior mining companies have been important contributors to mineral exploration across Canada, finding and delineating deposits, before selling them to senior producers for development," said Patricia Mohr, Scotiabank's Vice President of Economics and Commodity Market Specialist. "However, equity capital raised by junior mining companies on the TSX Venture plunged in 2012 and has moved even lower in 2013 year to date.

A revival of equity capital for junior miners will depend largely upon a cyclical rebound in metal and mineral prices and an improvement in investor sentiment for senior producers. However, M&A activity, financed by private equity, is beginning to pick up."

Highlights in the report include:

  • The hard-pressed beef and pork industry in Western Canada received some good news from the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (if ratified).
  • Spot uranium prices have dropped from US$66.50 per pound - just prior to the March 2011 Fukushima-Daiichi nuclear plant accident to US$34.75 today -instead of soaring as would have been the case, given the need for low-cost, base-load electricity demand in rapidly growing emerging markets. A recovery in uranium prices awaits the restart of reactors in Japan - likely to begin in 2014.
  • While potash prices will probably drift down over the balance of the year, the global cost curve indicates that most of the decline has already occurred, and prices are near bottom (at least on a sustainable basis).

Read the full Scotiabank Commodity Price Index at http://www.scotiabank.com/ca/en/0,,3112,00.html.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.

Scotiabank is a leading multinational financial services provider and Canada's most international bank. With more than 83,000 employees, Scotiabank and its affiliates serve some 21 million customers in more than 55 countries around the world. Scotiabank offers a broad range of products and services including personal, commercial, corporate and investment banking. In December 2012, Scotiabank became the first Canadian bank to be named Global Bank of the Year and Bank of the Year in the Americas by The Banker magazine, a Financial Times publication. With assets of $743 billion (as at July 31, 2013), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com.

For high-resolution video clips visit http://media.scotiabank.com/cdaen/multimedia/mc-videos.html. For more Scotiabank economic publications visit http://www.scotiabank.com/ca/en/0,,3112,00.html.

SOURCE: Scotiabank

For further information:

Patricia Mohr, Scotiabank Economics, (416) 866-4210, patricia.mohr@scotiabank.com; or Devinder Lamsar, Scotiabank Media Communications, (416) 933-1171, devinder.lamsar@scotiabank.com.


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890