Commodity index decline continues

Fuelled by a large decline in the metal and mineral, oil and gas and forest product sub-indices, the all-commodity index of Scotiabank fell by 1.7% in December from the previous month. The all-items index, in decline for three consecutive months, is off by 6.4% from one year ago. The metal and mineral sub-index is down by 3.3% fro th sam tim las year

Senio economis Patrici Moh sai th all-items index is at its lowest level in three years and that commodity pricesare expected to decline further in the coming months.

While the metal and mineral sub-index dropped in December, base metal prices remain at profitable levels, Mohr said. For example, aluminum prices in late January, at US67 cents per lb., were above the average operating cost in the non-communist world of 58 cents. Profit margins for aluminum, she pointed out, are lower than for other metals, in particular copper and nickel.

The all-commodity index tracks export prices of a variety of Canadian commodities, which are weighted according to their 1984 export values, except crude oil where the value of net exports is used.