Commodity index rises slightly (May 13, 1991)

Metals and minerals prices levelled off after dropping for months and the all-commodity price index of Scotiabank rose slightly in March after five straight monthly drops. Both the metals and minerals and all-items indices are down compared with one year ago.

Base metal prices steadied in March and, with the exception of aluminum, firmed in April,” wrote bank economist Patricia Mohr. “Nickel prices at US$4.07 per lb. in late April still yield solid profit margins for Canadian producers, whose full break-even costs (including depreciation and interest expense) averaged less than US$3.”

Mohr said a tight supply of high nickel alloy and stainless steel scrap is underpinning primary nickel consumption in Japan, where stainless steel exports remain strong. A slowdown in Japanese manufacturing investment and steel consumption is anticipated later this year.

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.