Stronger zinc, gold and copper prices more than offset weaker nickel, lead and aluminum prices in November, helping the commodity price index of Scotiabank edge up for the second straight month.
However, while economist Patricia Mohr noted that copper prices rose to US$1.08 per lb. in November, by mid-December they had slipped to US98 cents. Also, the sizable London Metal Exchange backwardation of recent months has disappeared.
During the first half of 1991, global demand for copper exceeded production; Mohr said a shift toward a surplus may now be in motion. She said mine capacity is being expanded in the face of economic slowdown in Japan and Germany; GNP growth in Japan has decelerated considerably; and electrical equipment manufacturers are currently reporting flat shipments and orders much below levels of a year ago.
The metals and minerals sub-index gained 0.4% in November from the previous month; it is off by 12.8% from one year ago. The all-items index was ahead by 0.5% in November. Slight gains were also recorded in the forest product and oil and gas indices; the small gains helped to offset weaker agricultural prices. The all-items index is down by 8.9% from one year ago. 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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