Scotiabank’s Commodity Price Index rebounded further in June — up +2.6% month-over-month (m/m) and +9.5% from the March 2015 low.

“In March, commodity prices plunged to the lowest level since January 2007 alongside a lacklustre global economy, with GDP growth in 2015 likely climbing at a subdued pace for the fourth consecutive year,” said Patricia Mohr, Vice President of Economics and Commodity Market Specialist at Scotiabank. “In addition, fierce competition for market share in oil and iron ore as well as a very strong U.S. dollar depressed gold and overall dollar-denominated commodity prices. However, a moderate rebound in oil prices — both international and domestic — lifted the All Items Index in the second quarter.

“Commodity prices corrected again in early July alongside a trifecta of negative developments — concern over the fallout on the Euro zone of the Greek debt situation, the sharp correction in China’s equity markets (-32% from peak to trough), and the prospect of an eventual return of Iran’s oil to world markets, following the nuclear accord (unlikely before 2016).”

Other highlights from the report include:

• A Special Feature on Canadian Petroleum Refining, which has seen a declining bilateral trade surplus with the U.S.
• How the reversal of Enbridge’s Line 9B pipeline and TransCanada’s proposed Energy East pipeline will boost the financial viability and competitiveness of refineries in Quebec and Atlantic Canada.
• U.S. housing permits have jumped to the highest level since July 2007, boding well for lumber and OSB prices.

Read the full Scotiabank Commodity Price Index online 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.

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