Despite economic turmoil in Europe that has some investors running for the exits, B.C. metals will remain lucrative this year.
Canada’s metal and mineral index jumped 10.3% in April when compared with March, according to a Scotiabank commodity price index report released Friday morning.
The index measures price trends in 32 of Canada’s major exports, and found that the overall index increased 4.2% month-over-month in April, but pulled back slightly in May.
Pat Mohr, Scotiabank’s vice-president of economics and commodity markets, said April was probably the high-water mark for 2010, but sovereign debt concerns in Europe will slow global growth for the rest of the year.
Still, B.C.’s base metals sector remains relatively safe since most of its commodities are shipped to Asian markets.
Mohr said: “The reason for the markdown is really related to austerity measures taken in Europe, related to governments paring back very high debt levels and deficits … there won’t be too much of an actual impact on the direction of commodity price movements out of Canada.”
While the base metals sector has showed a slight pull back, Mohr believes copper prices will remain above the US$3 per pound mark in 2010 and 2011, a lucrative price range for B.C. miners.
Western Canadian hard-coking coal bound for Asian markets climbed to US$200 per tonne earlier in the year from US$128 a tonne, and spot prices in Australia remained above the US$200 mark in May.
The report said China will remain the key growth leader for the rest of the year and concerns over a moderation in the pace of its growth are “overblown."