Commodity prices dropped 5.8% in November compared with one month prior, Scotiabank announced in its Commodity Price Index released December 19.
Compared with one year prior, prices are down 10.4%.
“While commodity prices have lost ground in 2013 – partly due to disappointingly slow global growth – signs point to a bottoming in 2014 and a return of the ‘bull-run’ in the second half of the decade,” said Patricia Mohr, Scotiabank vice-president of economics and commodity market specialist.
“Zinc is a top pick for early investors and lumber should post another solid advance in 2014.”
With the release of report just hours prior to the National Energy Board’s recommendations on the Northern Gateway pipeline, Scotiabank discussed the “critical need” to increase oil export pipeline capacity in Western Canada as a means to diversify its oil markets.
“British Columbia LNG projects have logistical cost advantage to northern Asia, but Infrastructure cost containment will be key,” the report said.
Scotiabank said that the oil and gas industry is key to Canada’s economy, saying that in 2012, the industry generated almost a quarter of the countries exports.
The sector with the biggest gain in 2013 was forest products, which was up 2.2% compared with October and 5.6% year-over-year.
Current prices for lumber are US$355, the report said, giving mills in B.C.’s interior a profit margin of 16% over total breakeven costs. Chinese demand and limited softwood supplies have led to a 28-month high in northern bleached softwood kraft (NBSK) pulp at US$990.
@EmmaCrawfordBIV
