BY FINANCIAL POST, CANWEST NEWS SERVICEJULY 23, 2009
OTTAWA - Canadian commodity prices were up for a second straight month in June, according to Scotiabank's monthly price index.
Its report, released Thursday, showed a 5.1 per cent monthly gain in commodity prices, with all sub-components rising. That marked a 7.5 per cent gain from April, which Scotiabank called the ``cyclical bottom'' of the commodities market.
Scotiabank said prices for oil and gas were up 12.2 per cent last month, metals and minerals gained 4.7 per cent, and even forest products were up 1.6 per cent. That was the firstly monthly increase in forestry prices since last August, according to Scotiabank.
Reasons highlighted for the gains in commodity prices included strong economic growth in China - a 7.9 per cent jump in second-quarter GDP - which is anticipated to be a leading indictor of global economic growth.
``The pickup (in China) reflected stronger domestic demand, as powerful government fiscal and monetary stimulus kicked in, more than offsetting reduced exports and a narrowing trade surplus.'' Patricia Mohr, commodity-market specialist at Scotiabank, said in a statement.
Also, Scotiabank said U.S. auto production is anticipated to pick up in the current third quarter, creating higher demand for metals used in the manufacturing of vehicles.
``Downsizing by GM and Chrysler will keep U.S. motor vehicle assemblies 22 per cent below a year ago in the third quarter,'' Mohr said. ``Production will however improve substantially from the first half of 2009, when assemblies were cut in half.''
Scotiabank also noted some increased driving activity in the U.S. helping to support oil prices, and an improved market for home building there, giving a boost to lumber prices.
