Commodity prices in Canada dropped 2.8% between August and September, according to Scotiabank’s Commodity Price Index released October 30.
The index for all items will likely fall further by the end of 2013. However, a correction in prices since April 2011, particularly in metals and minerals, should be over in large part by year-end.
“Traditionally, junior mining companies have been important contributors to mineral exploration across Canada, finding and delineating deposits, before selling them to senior producers for development,” said Patricia Mohr, Scotiabank’s vice-president of economics and commodity market specialist.
“However, equity capital raised by junior mining companies on the TSX Venture plunged in 2012 and has moved even lower in 2013 year-to-date.”
The reactivation of nuclear reactors in Japan, which is expected to begin in 2014, will lead to a rebound in uranium prices, which dropped from US$66.50 prior to the Fukushima-Daiichi nuclear plant accident in March 2011 to the current price of US$34.75.
Potash prices will likely drop by the end of the 2013, but the global cost curve indicates that most of the decline has already occurred.
In addition, the newly-signed trade agreement with the European Union, if ratified, will be good news for Western Canada’s beef and pork industry.
Year-over-year, commodity prices are down 3.8% overall.
