Metals sub-index continued to fall in October, bank says

In October, the metal and mineral sub-index of The Bank of Nova Scotias commodity price index dropped to the lowest level since January, 1979. A plunge in copper and lower aluminum prices swamped any gains in the price of lead, zinc, nickel and precious metals.

London Metal Exchange (LME) copper prices steadied at US74 per lb. in late November, partly because of a 4% drop in LME inventories over the past month. Economist Patricia Mohr reports cathode buying has picked up in Europe as poor prices have encouraged scrap dealers to hold supplies off the market. Russian copper shipments have also been displaced by a seasonal increase in grain traffic on the railways, though normal exports are likely to resume soon. Copper prices still exceed Western World cash costs, which are averaging US65 but are well below domestic costs. The net result, Mohr says, is that several British Columbia copper producers have announced temporary mine closures totaling about 75,000 tonnes of annual output. The metal and mineral sub-index was down 1.2% in October from September, and off by 14.4% from a year ago. The all-items index rose by 0.8% in October to a level 0.3% above that of a year ago.

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