Commodity prices retreated in February from gains made in January, but they're expected to rise in March, according to Scotiabank.
The bank's commodity price index, which measures price trends in 32 of Canada's major exports, fell 3.1% month-over-month after rising 9.5% in January when China took advantage of bargain prices of grains and base metals.
The bank's oil and gas index fell 9.1% in February, but could rise after U.S. government initiatives and stronger bank performance in the U.S. and the U.K. announced earlier in March boosted oil to US$54 a barrel in late March from a low of US$32.40 on December 19.
The bank's metal and mineral index managed a small gain in February, up 0.2% due to a strong rally in precious metals and copper prices. After profit-taking in mid-March, gold prices have jumped back above US$950 per ounce on renewed concerns over weakness of the U.S. dollar against the Euro.
Iron ore prices are expected to decline 20% to 35% this year, even though China increased its iron ore imports in February in anticipation of a spike in domestic steel demand resulting from Beijing's massive fiscal stimulus package.
Coal prices, while well off their highs in 2008, are expected to range between US$126 and $129 per tonne.