SOURCE: Scotiabank


February 23, 2015 08:00 ET

Scotiabank Commodity Price Index Falls Below April-2009 Recessionary Low

TORONTO, ON--(Marketwired - February 23, 2015) - Scotiabank's Commodity Price Index plunged again in January, -8.6% month-over-month (m/m) or -27.9% year-over-year (yr/yr), dropping below the April-2009 low during the 'Great Recession.' Commodity prices are now at levels last seen in January 2007.

"While global economic conditions are better than in 2009, an extended period of sub-par world GDP growth has triggered intensely competitive global markets, taking the steam out of commodity prices," said Patricia Mohr, Vice President of Economics and Commodity Market Specialist at Scotiabank. "A fight for market share is currently underway in oil and iron ore. The recent spike in the U.S. dollar trade-weighted has also been deflationary, with some commodity prices actually dragged lower in dollar terms.

"On a more positive note for Canada's oil sector, West Texas Intermediate (WTI) and Brent oil prices have rallied back to more than US$50 and US$60 respectively in mid-February. The rally reflects a sharp drop in U.S. oil-targeted drilling (-28.5% yr/yr as of February 20) combined with an expected 30% plunge in global exploration and project spending in 2015. These developments will slow output growth and restore balance in world oil markets in the second half of 2015. The net result, WTI oil prices should average US$55-60 in 2015 and US$65-70 in 2016."

Another highlight from the report includes:

  • Of the four key base metals -- copper, zinc, nickel and aluminium -- zinc is holding up the best at US$0.93 per pound, though prices have edged down from US$0.985 in December. A pickup in Chinese material demand is expected after the Lunar New Year Festival. 

Read the full Scotiabank Commodity Price Index online at:,,3112,00.html.

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