RBC Commodity Price Monitor
7
RBC’s commodity price index is a Fisher chain-weighted index of spot or transaction prices of 24 of the top ex- ported Canadian-produced commodities. The weight of each commodity in the overall index and various sub- indices is determined by its share of export volumes and is updated annually in February. David Onyett-Jeffries Economist 416-974-6525 [email protected] COMMODITY PRICE MONITOR June 2012 Commodity prices fall further in May The RBC commodity price index declined for the third straight month with the pace of decline accelerating to 2.8% in May from the 2.7% month-over-month decrease seen in April. The drop in the overall index reflected broad-based declines in commodity prices, with four of the five sub-indices falling in the month. Forest product prices did to post a sizable gain, helping the index ex- cluding energy post a more modest 1.7% decline. Commodity prices are below their year ago levels, with the overall index and the index excluding energy down 10.5% and 6.7%, respectively, from May 2011. • The energy products sub-index declined for the third consecutive month in May with the 3.9% decrease representing the largest monthly drop since August 2011. The sub-index has now fallen in eight of the last twelve months and sits at its lowest level since November 2010. The weakness in May reflected a sharp 8.4% plunge in crude oil prices which brought them below US$100 per barrel for the first time in 2012. Coal prices declined 6.8%, while highly depressed natural gas prices bounced 24.6% to provide some offset. The sub-index was down 14.5% on a year-over-year basis. • The agricultural products sub-index fell to its lowest level in four months, down 2.1% in May. All commodity prices in the grouping declined in the month, led by a 3.8% drop in canola prices that retraced a portion of the 27% increase seen over the first four months of the year. The monthly decline pushed the sub-index further below its year ago level, down 14.8% compared to the 13.0% annual decline seen in the previous month. • The forest products sub-index bucked the trend of the other commodity groupings and notched its sixth consecutive monthly increase with a 4.3% gain in May. The sub-index is now up 13% since November and sits at its highest level since last March. The recent gains have been driven by strength in lumber prices, which are up 33% since November on indications that the recovery in the US housing market is finally gaining traction. With the solid monthly increase, the sub-index moved above its year-ago level for the first time in eight months, up 9.3% compared to last May. • The non-precious metals & minerals sub-index dropped 3.4% in May, its third consecutive monthly decline and largest since last October. The sub- index is now at its lowest level since August 2010. Prices for base metals were the once again the primary source of weakness in the month, reflecting ongoing concerns about slowing global growth prospects. Despite the siz- able monthly falloff, the annual pace of decline in the sub-index moderated to 16.1% in May from the 16.3% rate seen in the previous month. • The precious metals sub-index decreased by 4.2% on a month-over-month basis in May as prices for both silver and gold continued their fall from the record high levels seen in the second half of 2011. The sub-index hit its lowest level since last June and dipped below its year-ago level for the first time since July 2009, down 0.5% on a year-over-year basis in May. 150 200 250 300 350 400 2007 2008 2009 2010 2011 2012 Monthly average January 1994 = 100 RBC commodity price index Source: RBC Economics Research 120 140 160 180 200 220 240 2007 2008 2009 2010 2011 2012 Monthly average January 1994 = 100 Index excluding energy product prices Source: RBC Economics Research 150 250 350 450 550 650 2007 2008 2009 2010 2011 2012 Monthly average January 1994 = 100 Energy products sub-index Source: RBC Economics Research
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Transcript of RBC Commodity Price Monitor
RBC’s commodity price index is a Fisher chain-weighted index of spot or transaction prices of 24 of the top ex-ported Canadian-produced commodities. The weight of each commodity in the overall index and various sub-indices is determined by its share of export volumes and is updated annually in February. David Onyett-Jeffries Economist 416-974-6525 [email protected]
COMMODITY PRICE MONITOR June 2012
Commodity prices fall further in May The RBC commodity price index declined for the third straight month with the pace of decline accelerating to 2.8% in May from the 2.7% month-over-month decrease seen in April. The drop in the overall index reflected broad-based declines in commodity prices, with four of the five sub-indices falling in the month. Forest product prices did to post a sizable gain, helping the index ex-cluding energy post a more modest 1.7% decline. Commodity prices are below their year ago levels, with the overall index and the index excluding energy down 10.5% and 6.7%, respectively, from May 2011.
• The energy products sub-index declined for the third consecutive month in May with the 3.9% decrease representing the largest monthly drop since August 2011. The sub-index has now fallen in eight of the last twelve months and sits at its lowest level since November 2010. The weakness in May reflected a sharp 8.4% plunge in crude oil prices which brought them below US$100 per barrel for the first time in 2012. Coal prices declined 6.8%, while highly depressed natural gas prices bounced 24.6% to provide some offset. The sub-index was down 14.5% on a year-over-year basis.
• The agricultural products sub-index fell to its lowest level in four months, down 2.1% in May. All commodity prices in the grouping declined in the month, led by a 3.8% drop in canola prices that retraced a portion of the 27% increase seen over the first four months of the year. The monthly decline pushed the sub-index further below its year ago level, down 14.8%compared to the 13.0% annual decline seen in the previous month.
• The forest products sub-index bucked the trend of the other commodity groupings and notched its sixth consecutive monthly increase with a 4.3% gain in May. The sub-index is now up 13% since November and sits at its highest level since last March. The recent gains have been driven by strength in lumber prices, which are up 33% since November on indications that the recovery in the US housing market is finally gaining traction. With the solid monthly increase, the sub-index moved above its year-ago level for the first time in eight months, up 9.3% compared to last May.
• The non-precious metals & minerals sub-index dropped 3.4% in May, its third consecutive monthly decline and largest since last October. The sub-index is now at its lowest level since August 2010. Prices for base metals were the once again the primary source of weakness in the month, reflecting ongoing concerns about slowing global growth prospects. Despite the siz-able monthly falloff, the annual pace of decline in the sub-index moderated to 16.1% in May from the 16.3% rate seen in the previous month.
• The precious metals sub-index decreased by 4.2% on a month-over-month basis in May as prices for both silver and gold continued their fall from the record high levels seen in the second half of 2011. The sub-index hit its lowest level since last June and dipped below its year-ago level for the first time since July 2009, down 0.5% on a year-over-year basis in May.
150
200
250
300
350
400
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
RBC commodity price index
Source: RBC Economics Research
120
140
160
180
200
220
240
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
Index excluding energy product prices
Source: RBC Economics Research
150
250
350
450
550
650
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
Energy products sub-index
Source: RBC Economics Research
ECONOMICS | RESEARCH 2
COMMODITY PRICE MONITOR | JUNE 2012 RBC commodity price sub-indices
2009 2010 2011 Q3-11 Q4-11 Q1-12 Mar-12 Apr-12 May-12
IndicesRBC commodity price index 200.6 253.0 295.1 309.0 293.2 281.8 289.7 281.8 273.9
Month-over-month/quarter-over-quarter % change 4.2 -5.1 -3.9 -0.4 -2.7 -2.8
Year-over-year % change -33.1 26.1 16.7 24.8 19.0 4.5 -5.8 -12.0 -10.5
RBC commodity price index ex. energy 146.6 180.6 213.4 217.9 218.8 201.6 208.4 205.1 201.6
Month-over-month/quarter-over-quarter % change 1.3 0.4 -7.9 -0.7 -1.6 -1.7
Year-over-year % change -19.9 23.2 18.2 24.0 23.3 1.4 -4.1 -7.6 -6.7
Sub-indicesAgricultural products 114.9 124.5 164.2 175.8 163.3 150.2 154.2 152.4 149.3
Month-over-month/quarter-over-quarter % change 4.9 -7.1 -8.0 2.1 -1.2 -2.1
Year-over-year % change -26.7 8.3 31.9 56.5 27.4 3.3 -7.3 -13.0 -14.8
Energy products 257.7 327.6 374.3 401.7 360.0 359.5 367.4 353.3 339.6
Month-over-month/quarter-over-quarter % change 6.9 -10.4 -0.2 -0.2 -3.8 -3.9
Year-over-year % change -42.9 27.1 14.3 24.5 14.1 6.9 -8.0 -16.5 -14.5
Forest products 83.3 109.3 111.4 110.4 110.2 105.5 111.4 112.6 117.5
Month-over-month/quarter-over-quarter % change -7.5 -0.2 -4.3 2.9 1.1 4.3
Year-over-year % change -16.1 31.3 1.9 -0.9 4.8 -7.4 -6.9 -1.9 9.3
Non-precious metals & minerals 222.0 270.1 309.1 322.6 313.3 276.4 286.5 277.7 268.3
Month-over-month/quarter-over-quarter % change -0.5 -2.9 -11.8 -1.9 -3.1 -3.4
Year-over-year % change -27.1 21.7 14.5 22.5 19.6 -5.9 -11.6 -16.3 -16.1
Precious metals 249.1 317.8 422.1 414.1 461.9 438.8 441.1 433.1 414.7
Month-over-month/quarter-over-quarter % change 10.9 11.5 -5.0 -3.7 -1.8 -4.2
Year-over-year % change 10.3 27.6 32.8 34.8 46.4 21.2 13.3 5.1 -0.5
Period averages
90
110
130
150
170
190
210
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
Agricultural products sub-index
Source: RBC Economics Research
70
80
90
100
110
120
130
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
Forest products sub-index
Source: RBC Economics Research
150
200
250
300
350
400
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
Non-precious metals & minerals sub-index
Source: RBC Economics Research
100
150
200
250
300
350
400
450
500
2007 2008 2009 2010 2011 2012
Monthly average
January 1994 = 100
Precious metals sub-index
Source: RBC Economics Research
ECONOMICS | RESEARCH 3
COMMODITY PRICE MONITOR | JUNE 2012 Commodity prices trends Agricultural products
50
100
150
200
250
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Barley
Source: Haver Analytics, RBC Economics Research
200
300
400
500
600
700
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Canola
Source: Haver Analytics, RBC Economics Research
100
150
200
250
300
350
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Corn
Source: Haver Analytics, RBC Economics Research
200
350
500
650
800
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Wheat
Source: Haver Analytics, RBC Economics Research
5
7
9
11
13
15
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per 100 pounds
Potatoes
Source: Haver Analytics, RBC Economics Research
70
80
90
100
110
120
130
140
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per 100 pounds
Live cattle
Source: Haver Analytics, RBC Economics Research
35
45
55
65
75
85
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per 100 pounds
Live hogs
Source: Haver Analytics, RBC Economics Research
3.50
4.50
5.50
6.50
7.50
8.50
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per kilogram
Fresh salmon
Source: Haver Analytics, RBC Economics Research
ECONOMICS | RESEARCH 4
COMMODITY PRICE MONITOR | JUNE 2012
Energy products
Precious metals
Commodity price trends
Forest products
500
700
900
1100
1300
1500
1700
1900
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per troy ounce
Gold
Source: Haver Analytics, RBC Economics Research
5
15
25
35
45
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per troy ounce
Silver
Source: Haver Analytics, RBC Economics Research
40
80
120
160
200
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Coal
Source: Haver Analytics, RBC Economics Research
30
60
90
120
150
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per barrel
Crude oil
Source: Haver Analytics, RBC Economics Research
0
3
6
9
12
15
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per million British thermal units
Natural gas
Source: Haver Analytics, RBC Economics Research
150
175
200
225
250
275
300
325
350
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per 1,000 board feet
Lumber
Source: Haver Analytics, RBC Economics Research
400
500
600
700
800
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Newsprint
Source: Bloomberg, RBC Economics Research
600
700
800
900
1000
1100
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Pulp
Source: Bloomberg, RBC Economics Research
ECONOMICS | RESEARCH 5
COMMODITY PRICE MONITOR | JUNE 2012
Non-precious metals & minerals
Commodity price trends
0.50
0.70
0.90
1.10
1.30
1.50
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per pound
Aluminum
Source: Haver Analytics, RBC Economics Research
1
2
3
4
5
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per pound
Copper
Source: Haver Analytics, RBC Economics Research
40
80
120
160
200
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Iron ore
Source: Haver Analytics, RBC Economics Research
0.20
0.60
1.00
1.40
1.80
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per pound
Lead
Source: Haver Analytics, RBC Economics Research
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per pound
Nickel
Source: Haver Analytics, RBC Economics Research
0.40
0.80
1.20
1.60
2.00
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per pound
Zinc
Source: Haver Analytics, RBC Economics Research
100
300
500
700
900
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per tonne
Potash
Source: Haver Analytics, RBC Economics Research
20
50
80
110
140
2007 2008 2009 2010 2011 2012
Monthly average 10-year average
US$ per pound
Uranium
Source: Haver Analytics, RBC Economics Research
ECONOMICS | RESEARCH 6
COMMODITY PRICE MONITOR | JUNE 2012 Commodity price trends
2009 2010 2011 Q3-11 Q4-11 Q1-12 Mar-12 Apr-12 May-12
Agricultural productsBarley (US $/tonne) 128.3 158.4 207.2 210.4 210.9 215.6 222.8 237.2 237.1
Year-over-year % change -36.0 23.4 30.8 30.0 16.5 8.8 10.0 13.5 13.2
Canola (US $/tonne) 371.0 429.4 566.9 596.4 569.8 506.5 595.8 631.4 607.2
Year-over-year % change -29.7 15.7 32.0 57.3 29.3 -4.1 1.3 5.0 2.8
Corn (US $/tonne) 165.5 185.9 291.7 302.1 269.3 277.7 280.7 274.0 269.3
Year-over-year % change -25.8 12.3 56.9 66.2 11.5 -1.8 -3.4 -14.2 -12.5
Wheat (US $/tonne) 300.5 312.4 439.6 429.8 405.2 378.1 372.9 349.8 347.3
Year-over-year % change -33.9 3.9 40.7 31.8 5.6 -15.8 -13.8 -24.1 -27.0
Potatoes (US $/cwt) 8.59 8.07 10.08 10.99 8.32 9.51 9.98 10.75 9.86
Year-over-year % change -3.9 -6.0 24.9 41.4 -0.1 -1.9 -7.1 -3.8 -11.7
Live cattle (US $/cwt) 80.4 92.0 113.3 111.3 119.0 126.7 128.0 124.0 121.0
Year-over-year % change -9.9 14.4 23.1 19.6 25.2 15.2 11.3 4.2 8.0
Live hogs (US $/cwt) 42.0 55.1 66.5 71.5 65.5 64.7 65.2 62.8 61.6
Year-over-year % change -11.9 31.1 20.7 18.7 28.1 7.7 3.7 -7.4 -10.2
Fresh salmon (US $/kg) 4.92 6.15 5.91 7.03 5.21 4.36 4.95 5.08 5.03
Year-over-year % change 1.5 24.9 -3.9 12.3 -17.2 -32.7 -32.0 -35.9 -29.8
EnergyCoal (US $/tonne) 71.8 99.0 120.9 120.6 114.2 112.0 105.1 101.6 94.7
Year-over-year % change -43.5 37.8 22.2 28.9 6.1 -13.1 -16.7 -16.9 -20.0
Crude Oil (US $/barrel) 61.7 79.4 95.1 89.7 94.1 102.9 106.2 103.3 94.7
Year-over-year % change -38.0 28.7 19.7 17.8 10.6 9.5 3.2 -6.1 -6.5
Natural Gas (US $/mmbtu) 3.95 4.39 4.00 4.12 3.32 2.45 2.16 1.95 2.43
Year-over-year % change -55.4 11.0 -8.9 -3.7 -12.5 -41.5 -45.6 -54.0 -43.5
Forest productsLumber (US $/1000 board ft) 181.5 254.9 255.3 245.2 238.2 265.9 280.4 280.5 305.5
Year-over-year % change -17.2 40.4 0.1 10.4 -11.3 -10.4 -4.7 6.7 34.4
Newsprint (US $/tonne) 569.4 585.6 624.5 624.4 623.3 623.8 623.1 623.1 621.8
Year-over-year % change -15.8 2.8 6.7 8.8 2.7 0.0 -0.6 -0.3 -0.4
Pulp (US $/tonne) 715.9 957.0 976.8 1022.7 995.6 920.2 870.0 893.7 900.0
Year-over-year % change -16.6 33.7 2.1 4.2 -0.8 -5.2 -11.7 -11.8 -11.7
Source: Haver Analytics, Bloomberg, RBC Economics Research
Period averages
ECONOMICS | RESEARCH 7
COMMODITY PRICE MONITOR | JUNE 2012
The material contained in this report is the property of Royal Bank of Canada and may not be reproduced in any way, in whole or in part, without express authorization of the copyright holder in writing. The statements and statistics contained herein have been prepared by RBC Economics Research based on information from sources con-sidered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This publication is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
®Registered trademark of Royal Bank of Canada. ©Royal Bank of Canada.
Commodity price trends
2009 2010 2011 Q3-11 Q4-11 Q1-12 Mar-12 Apr-12 May-12
Non-precious metals & mineralsAluminum (US $/lb) 0.76 0.99 1.09 1.09 0.95 0.99 0.99 0.93 0.91
Year-over-year % change -35.2 30.3 10.2 14.8 -10.8 -13.0 -14.5 -23.1 -22.8
Copper (US $/lb) 2.34 3.42 4.00 4.07 3.40 3.77 3.84 3.75 3.59
Year-over-year % change -25.7 46.0 16.9 24.0 -13.3 -13.8 -11.3 -12.9 -11.3
Iron Ore (US $/tonne) 80.0 145.9 167.8 175.9 140.8 141.8 144.7 147.6 136.6
Year-over-year % change -48.7 82.4 15.0 28.0 -9.7 -20.6 -14.6 -17.7 -22.8
Lead (US $/lb) 0.78 0.97 1.09 1.12 0.90 0.95 0.93 0.94 0.91
Year-over-year % change -17.7 25.0 11.8 21.2 -17.0 -19.6 -21.4 -24.7 -17.4
Nickel (US $/lb) 6.67 9.89 10.35 10.00 8.30 8.91 8.48 8.12 7.72
Year-over-year % change -30.1 48.4 4.7 4.0 -22.4 -27.0 -30.2 -32.0 -29.7
Zinc (US $/lb) 0.75 0.98 0.99 1.01 0.86 0.92 0.92 0.91 0.88
Year-over-year % change -11.3 30.1 1.5 10.5 -18.0 -15.4 -13.4 -15.8 -10.7
Potash (US $/tonne) 630.4 331.9 435.3 471.3 473.0 479.8 480.0 468.8 457.5
Year-over-year % change 10.6 -47.4 31.2 41.0 37.8 28.2 26.3 13.3 9.4
Uranium (US $/lb) 46.7 46.0 56.2 51.8 52.6 51.9 51.3 51.3 51.9
Year-over-year % change -27.3 -1.5 22.4 15.4 -5.3 -19.1 -19.2 -11.3 -7.4
Precious metalsGold (US $/ounce) 972.3 1224.3 1570.5 1702.3 1683.3 1690.7 1673.8 1649.7 1588.3
Year-over-year % change 11.5 25.9 28.3 38.8 23.1 21.9 17.5 11.8 5.2
Silver (US $/ounce) 14.7 20.2 35.3 38.9 31.9 32.6 32.9 31.5 28.8
Year-over-year % change -2.3 37.1 75.4 104.7 20.9 2.0 -8.4 -26.0 -22.2
Source: Haver Analytics, Bloomberg, RBC Economics Research
Period averages
