1. No category

COMMODITY PRICE MONITOR
October 2014
RBC commodity price index
RBC commodity price index fell broadly in September
January 1994 = 100
400
350
300
250
200
150
2008
2009
2010
2011
2012
2013
2014
Monthly average
Source: RBC Economics Research
Index excluding energy product prices
January 1994 = 100
240
210
180
150
120
2008
2009
2010
2011
2012
2013
2014
Monthly average
Source: RBC Economics Research
Energy products sub-index
January 1994 = 100
650
550
450
350
250
150
2008
2009
2010
2011
2012
2013
2014
Monthly average
Source: RBC Economics Research
RBC’s commodity price index is a Fisher chain-weighted
index of spot or transaction prices of 24 of the top exported Canadian-produced commodities. The weight of
each commodity in the overall index and various subindices is determined by its share of export volumes and
is updated annually in February.
Josh Nye
Economist
416-974-3979
josh.nye@rbc.com
The RBC commodity price index fell 2.7% in September, building on a 3.6%
decline in August to bring the overall index to its lowest level since mid-2012.
The decline in September reflected widespread moderation in commodity prices with all five sub-indices falling in the month. The greatest declines were in
precious metals (-4.8%) and energy products (-3.1%), with the latter down
nearly 12% over the last three months as both crude oil and natural gas prices
slumped in the third quarter. Excluding the energy component, prices were
2.3% lower in the month. The ex-energy index is now 3.2% below its year-ago
level while the headline index is down a greater 6.8% reflecting weaker energy
prices relative to last September. Both the energy and ex-energy indices remain elevated relative to their historical norms despite recent moderation.
 The energy products sub-index fell 3.1% in September following declines
of 3.2% and 6.1% in July and August, respectively. Weakness in the latest
month reflected lower crude oil prices (-3.4%) as strong U.S. production,
growing Libyan exports, and weakening global demand all continued to
weigh on prices.1 Coal prices (-4.4%) also contributed to the decline, while
natural gas prices edged up 0.4% from August’s year-to-date low. With
crude oil and coal prices both significantly lower than year-ago levels, the
energy products sub-index is down 10.4% year-over-year.
 The agricultural products sub-index slipped 1.3% in September, marking
a fourth consecutive monthly decline and leaving the index at a four-year
low. Moderation in the latest month once again reflected broad declines,
with prices falling for seven of eight agricultural products in the index.
Field crops, aside from wheat, saw significant declines with barley (-8.2%),
canola (-5.9%), and corn (-7.6%) prices all falling in September due to
stronger production estimates for the latest crop year. 2,3 Prices for live hogs
fell 11.8% following a 10.8% decline in August as supply fears related to
the PED virus, which supported record prices earlier this year, continued to
ease.4 Despite a cumulative decline of over 10% in the last four months, the
agricultural products sub-index is down just 3.9% on a year-over-year basis.
 The forest products sub-index edged down 1.1% to only partially retrace
solid gains in the previous two months. The decline largely reflected lower
lumber prices (-1.8%) as U.S. housing starts disappointed in August following a strong gain in the prior month. Newsprint and pulp prices remained
fairly steady, though the latter remains 8.4% higher year-over-year. With
lumber prices also slightly higher than a year-ago, the forest products subindex is up 4.2% in the twelve months to September.
 The non-precious metals & minerals sub-index fell 2.1% in September to
more than retrace a 0.7% increase in August as non-precious metals prices
saw broad-based declines. Iron ore (-11.0%) saw the most significant decline, likely reflecting surprisingly weak Chinese industrial production,
while lead prices were down 5.1% in the month and other metals saw more
moderate declines in the range of 1-3%. The metals and minerals sub-index
is down 4.7% year-over-year, unchanged from the previous month.
 The precious metals sub-index fell 4.8% to its lowest level of 2014 with
gold (-4.5%) and silver (-6.7%) prices falling in September as the U.S. dollar appreciated significantly (precious metals and USD tend to move in opposite directions). The precious metals index is down 9.5% year-over-year.
COMMODITY PRICE MONITOR | OCTOBER 2014
RBC commodity price sub-indices
Forest products sub-index
Agricultural products sub-index
January 1994 = 100
January 1994 = 100
225
140
130
200
120
175
110
100
150
90
125
80
100
70
2008
2009
2010
2011
2012
2013
2014
2008
2009
2010
2011
Monthly average
2012
2013
2014
2013
2014
Monthly average
Source: RBC Economics Research
Source: RBC Economics Research
Precious metals sub-index
Non-precious metals & minerals sub-index
January 1994 = 100
January 1994 = 100
400
500
350
400
300
300
250
200
200
150
100
2008
2009
2010
2011
2012
2013
2014
2008
2009
2010
2011
Monthly average
2012
Monthly average
Source: RBC Economics Research
Source: RBC Economics Research
Period averages
2011
2012
2013
Q1-14
Q2-14
Q3-14
Jul-14
Aug-14
Sep-14
Indices
RBC commodity price index
296.0
279.0
278.4
Month-over-month/quarter-over-quarter % change
Year-over-year % change
RBC commodity price index ex. energy
280.6
271.7
280.9
270.9
263.5
2.1
0.7
-3.2
-0.4
-3.6
-2.7
16.8
-5.7
-0.2
-1.9
2.1
-3.5
0.6
-4.3
-6.8
215.0
206.6
193.6
185.0
182.7
183.5
185.8
184.5
180.2
-0.2
-1.2
0.4
2.8
-0.7
-2.3
Month-over-month/quarter-over-quarter % change
Year-over-year % change
278.8
18.5
-3.9
-6.3
-11.9
-5.5
-1.3
1.1
-1.7
-3.2
169.4
159.6
151.3
144.9
147.3
136.9
143.5
134.5
132.7
3.2
1.6
-7.0
-2.1
-6.3
-1.3
Sub-indices
Agricultural products
Month-over-month/quarter-over-quarter % change
Year-over-year % change
Energy products
34.4
-5.8
-5.2
-8.6
-8.2
-6.1
-6.3
-7.9
-3.9
374.4
345.0
363.6
377.5
386.0
361.3
380.5
357.3
346.2
4.0
2.3
-6.4
-3.2
-6.1
-3.1
Month-over-month/quarter-over-quarter % change
Year-over-year % change
Forest products
14.3
-7.9
5.4
7.3
8.6
-6.0
-0.3
-7.2
-10.4
111.4
115.9
127.6
132.8
126.9
131.3
130.4
132.5
131.0
0.6
-4.5
3.5
4.9
1.7
-1.1
Month-over-month/quarter-over-quarter % change
Year-over-year % change
Non-precious metals & minerals
1.9
4.0
10.1
0.0
2.8
7.6
10.0
8.7
4.2
309.1
267.8
241.6
221.7
220.3
225.2
225.7
227.4
222.5
-3.2
-0.6
2.2
3.5
0.7
-2.1
Month-over-month/quarter-over-quarter % change
Year-over-year % change
Precious metals
14.4
-13.4
-9.8
-15.6
-8.1
-4.2
-3.0
-4.7
-4.7
422.1
436.5
365.4
332.1
329.4
327.7
336.9
331.0
315.1
1.2
-0.8
-0.5
2.8
-1.7
-4.8
-22.2
-9.8
-4.1
2.3
-4.9
-9.5
Month-over-month/quarter-over-quarter % change
Year-over-year % change
ECONOMICS | RESEARCH
2
32.8
3.4
-16.3
COMMODITY PRICE MONITOR | OCTOBER 2014
Commodity prices trends
Agricultural products
Canola
Barley
US$ per tonne
US$ per tonne
300
700
250
600
200
500
150
400
100
300
50
2008
200
2009
2010
2011
2012
Monthly average
2013
2014
2008
2009
10-year average
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Wheat
Corn
US$ per tonne
US$ per tonne
350
750
300
600
250
450
200
300
150
100
2008
150
2009
2010
2011
2012
Monthly average
2013
2014
2008
2009
10-year average
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Potatoes
Live cattle
US$ per 100 pounds
US$ per 100 pounds
14
170
160
150
12
140
130
120
10
110
100
8
90
80
70
6
2008
2009
2010
2011
2012
Monthly average
2013
2014
2008
2009
2010
2011
2012
Monthly average
10-year average
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Source: Haver Analytics, RBC Economics Research
Live hogs
Fresh salmon
US$ per 100 pounds
US$ per kilogram
105
8.50
95
7.50
85
6.50
75
65
5.50
55
4.50
45
3.50
35
2008
2009
2010
Monthly average
Source: Haver Analytics, RBC Economics Research
2011
2012
2013
10-year average
2014
2008
2009
2010
Monthly average
2011
2012
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
ECONOMICS | RESEARCH
3
COMMODITY PRICE MONITOR | OCTOBER 2014
Commodity price trends
Energy products
Forest products
Coal
Lumber
US$ per tonne
US$ per 1,000 board feet
200
450
160
350
120
250
80
40
150
2008
2009
2010
2011
2012
Monthly average
2013
2014
2008
2009
10-year average
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Newsprint
Crude oil (WTI)
US$ per barrel
US$ per tonne
150
800
120
700
90
600
60
500
30
400
2008
2009
2010
2011
2012
Monthly average
2013
2014
2008
2009
10-year average
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Bloomberg, RBC Economics Research
Pulp
Natural gas
US$ per tonne
US$ per million British thermal units
15
1100
12
1000
9
900
6
800
3
700
0
600
2008
2009
2010
2011
2012
Monthly average
2013
2014
2008
2009
10-year average
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Bloomberg, RBC Economics Research
Precious metals
Silver
Gold
US$ per troy ounce
US$ per troy ounce
45
2000
1700
35
1400
25
1100
15
800
5
500
2008
2009
2010
Monthly average
Source: Haver Analytics, RBC Economics Research
ECONOMICS | RESEARCH
4
2011
2012
2013
10-year average
2014
2008
2009
2010
Monthly average
Source: Haver Analytics, RBC Economics Research
2011
2012
2013
10-year average
2014
COMMODITY PRICE MONITOR | OCTOBER 2014
Commodity price trends
Non-precious metals & minerals
Aluminum
Copper
US$ per pound
US$ per pound
1.50
5
1.30
4
1.10
3
0.90
2
0.70
0.50
2008
1
2009
2010
2011
2012
Monthly average
2013
2014
2008
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Iron ore
Lead
US$ per tonne
US$ per pound
200
1.80
160
1.40
120
1.00
80
0.60
0.20
40
2008
2009
10-year average
2009
2010
2011
2012
Monthly average
2013
2008
2014
2009
2010
2011
2012
Monthly average
10-year average
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Source: Haver Analytics, RBC Economics Research
Potash
Nickel
US$ per pound
US$ per tonne
16
900
14
700
12
10
500
8
300
6
4
100
2008
2009
2010
2011
2012
Monthly average
2013
2014
2008
10-year average
2010
2011
2012
Monthly average
Source: Haver Analytics, RBC Economics Research
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
Uranium
Zinc
US$ per pound
US$ per pound
100
1.20
80
1.00
60
0.80
40
0.60
0.40
20
2008
2009
2009
2010
Monthly average
Source: Haver Analytics, RBC Economics Research
2011
2012
2013
10-year average
2014
2008
2009
2010
Monthly average
2011
2012
2013
2014
10-year average
Source: Haver Analytics, RBC Economics Research
ECONOMICS | RESEARCH
5
COMMODITY PRICE MONITOR | OCTOBER 2014
Commodity price trends
Period averages
2011
2012
2013
Q1-14
Q2-14
Q3-14
Jul-14
Aug-14 Sep-14
Agricultural products
Barley (US $/tonne)
Year-over-year % change
Canola (US $/tonne)
Year-over-year % change
Corn (US $/tonne)
Year-over-year % change
Wheat (US $/tonne)
Year-over-year % change
Potatoes (US $/cwt)
Year-over-year % change
Live cattle (US $/cwt)
Year-over-year % change
Live hogs (US $/cwt)
Year-over-year % change
Fresh salmon (US $/kg)
Year-over-year % change
207.2
240.3
202.2
129.5
137.9
130.1
132.4
134.6
123.5
30.8
16.0
-15.9
-45.3
-40.2
-31.9
-38.1
-28.8
-27.4
567.7
598.0
545.2
390.4
432.8
399.1
428.7
396.1
372.7
32.4
5.3
-8.8
-36.7
-29.2
-20.2
-20.6
-17.8
-22.2
291.7
298.4
259.4
209.9
214.0
174.1
182.7
176.4
163.1
56.9
2.3
-13.1
-31.2
-26.5
-28.0
-34.6
-26.1
-21.4
411.5
356.8
325.7
342.9
326.9
308.9
318.1
299.9
308.6
48.0
-13.3
-8.7
0.1
-2.7
0.2
1.0
-2.4
2.2
9.78
9.00
9.43
9.43
10.81
8.70
9.81
8.22
8.07
21.2
-8.0
4.8
16.4
6.6
-19.7
-18.5
-31.5
-4.8
113.3
121.5
124.7
143.3
147.0
156.7
156.0
158.0
156.0
23.1
7.3
2.6
15.3
18.2
29.5
30.0
30.6
27.9
66.5
64.2
67.2
69.5
85.5
83.3
93.3
83.2
73.4
20.7
-3.4
4.7
11.3
25.2
13.2
23.1
12.1
3.8
5.91
4.77
6.76
7.76
6.94
5.94
6.39
5.93
5.49
-3.9
-19.3
41.7
20.3
-3.3
-9.0
-12.1
-11.4
-2.3
121.4
96.4
84.6
77.1
72.7
67.9
68.8
68.9
65.9
22.7
-20.7
-12.2
-17.0
-15.6
-12.2
-11.0
-10.4
-15.0
95.1
94.2
97.9
98.8
103.3
97.8
103.6
96.5
93.2
19.7
-0.9
4.0
4.7
9.7
-7.6
-1.1
-9.4
-12.3
Energy
Coal (US $/tonne)
Year-over-year % change
Crude Oil (US $/barrel)
Year-over-year % change
Natural Gas (US $/mmbtu)
Year-over-year % change
4.00
2.75
3.73
5.20
4.61
0.00
4.05
3.91
0.00
-8.9
-31.1
35.4
49.1
14.9
0.0
11.9
14.0
0.0
255.2
299.0
355.8
367.1
335.2
355.9
351.1
361.6
355.0
1.7
17.2
19.0
-5.6
-0.6
8.8
12.9
10.9
3.1
624.5
621.4
598.2
584.9
583.6
581.8
583.2
581.5
580.6
7.2
-0.5
-3.7
-4.9
-2.8
-1.4
-1.3
-1.3
-1.5
978.1
871.4
934.4
1006.9 1029.0
1029.2
1030.0
1029.9
1027.6
2.5
-10.9
7.2
8.6
8.9
8.5
8.4
Forest products
Lumber (US $/1000 board ft)
Year-over-year % change
Newsprint (US $/tonne)
Year-over-year % change
Pulp (US $/tonne)
Year-over-year % change
Source: Haver Analytics, Bloomberg, RBC Economics Research
ECONOMICS | RESEARCH
6
12.9
11.1
COMMODITY PRICE MONITOR | OCTOBER 2014
Commodity price trends
Period averages
2011
2012
2013
Q1-14
Q2-14
Q3-14
Jul-14
Aug-14 Sep-14
Non-precious metals & minerals
Aluminum (US $/lb)
Year-over-year % change
Copper (US $/lb)
Year-over-year % change
Iron Ore (US $/tonne)
Year-over-year % change
Lead (US $/lb)
Year-over-year % change
Nickel (US $/lb)
Year-over-year % change
Zinc (US $/lb)
Year-over-year % change
Potash (US $/tonne)
Year-over-year % change
Uranium (US $/lb)
Year-over-year % change
1.09
0.92
0.84
0.77
0.82
0.90
0.88
0.92
0.90
10.2
-15.8
-8.6
-14.7
-2.0
11.6
10.1
11.9
13.2
4.00
3.60
3.32
3.19
3.08
3.17
3.22
3.18
3.12
16.9
-9.8
-7.9
-11.2
-5.0
-1.1
3.1
-2.5
-4.0
167.8
128.5
135.4
120.4
102.6
90.3
96.1
92.6
82.4
15.0
-23.4
5.3
-18.8
-18.2
-32.0
-24.5
-32.4
-38.6
1.09
0.94
0.97
0.95
0.95
0.99
0.99
1.01
0.96
11.8
-14.1
3.9
-8.5
2.0
3.8
6.9
2.9
1.6
10.35
7.95
6.80
6.64
8.37
8.42
8.64
8.42
8.20
4.7
-23.2
-14.4
-15.4
23.4
33.5
39.0
30.1
31.2
0.99
0.88
0.87
0.92
0.94
1.05
1.05
1.06
1.04
1.5
-11.2
-1.9
-0.2
12.7
24.3
25.9
22.9
24.1
435.3
459.0
379.2
314.0
287.0
287.0
287.0
287.0
287.0
31.2
5.4
-17.4
-19.7
-26.8
-26.8
-27.0
-27.0
-26.3
56.2
48.9
38.5
35.2
30.0
31.1
28.4
30.6
34.2
22.4
-13.0
-21.2
-17.8
-26.3
-13.3
-25.4
-12.8
-0.5
1293.1 1288.8
1281.3
1310.6
1295.2
1236.6
Precious metals
Gold (US $/ounce)
Year-over-year % change
Silver (US $/ounce)
Year-over-year % change
1570.5
1668.6 1410.7
28.3
6.2
-15.5
-20.8
-9.1
-3.5
1.7
-4.0
-8.2
35.3
31.1
23.8
20.5
19.7
19.7
20.9
19.7
18.4
75.4
-11.9
-23.5
-31.9
-15.2
-7.9
6.3
-10.6
-18.2
Source: Haver Analytics, Bloomberg, RBC Economics Research
1
U.S. Energy Information Administration, Short-Term Energy and Winter Fuels Outlook, October 2014.
United States Department of Agriculture, World Agricultural Supply and Demand Estimates, September 2014.
3
Agriculture and Agri-Food Canada, Outlook for Principal Field Crops, September 2014.
4
Bloomberg, Hog Futures Fall to Nine-Month Low as Supply Woes Ease, October 16, 2014.
2
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 considered 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.
ECONOMICS | RESEARCH
7