The average price of 32 of Canada's major commodities continued to rise in June, up 5.1% between May and June, according to Scotiabank's commodity price index.
All major sub-sectors within the index were higher. The index has risen 7.5% since April, when the market hit its cyclical bottom.
For a second consecutive month, oil and gas led the commodity increase. They rose 12.2% from May to June. WTI oil prices jumped from US$59.21 per barrel in May to a high of US$73.38 on July 3. Canada's natural gas export prices edged up in June to an estimated US$3.84 per thousand cubic feet, although prices remain exceptionally weak compared with the US$10.85 price a year ago.
Prices have been pressured by slumping industrial demand; however, Scotiabank said prices should rally in the next six months as this year's decline in drilling will eventually cut U.S. output. The bank forecasts an average price of US$4 for 2009 and US$5.25 for 2010.
After 10 months of continuous declines, forestry product prices in June showed their first price increase since August 2008. The forest products index rose 1.6%, with building materials and pulp prices offsetting price declines for newsprint and fine paper. Building products were higher as U.S. housing starts rose to 582,000 units in June from 479,000 in April.
June's metals and minerals index strengthened 4.7% from a strong rally in base metals and moderate gains in precious metals and higher uranium prices. These offset price declines in potash and cobalt.
Per-pound copper prices climbed to a six-month high of US$2.45 this week, which is up from US$2.07 in May due to a pick up in Chinese industrial activity in the second quarter.