A 4.9% slide in the metals and minerals sub-index contributed to a small drop in Scotiabank’s January all-commodity price index. The all- items index, off by 1.6% from December, is down by 13% from January, 1989. After the decline in January, base metal prices edged up in mid- February, bank economist Patricia Mohr reports. Nickel, for example, rebounded from US$2.80 per lb. to above the $3 level.
“The correction over the past year was largely the result of a massive global inventory adjustment by stainless steel distributors and manufacturers using this product,” Mohr said.
“The recent announcement of production cutbacks by Inco (TSE) and Falconbridge Ltd. has encouraged merchants to replenish inventories, thereby stabilizing the market.”
The agricultural sub-index was also down in January. However, stronger oil and gas and forest products prices were registered for the month.
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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