The decline in Scotiabank’s Commodity Price Index in April was mild.
It fell only 0.2% month-over-month despite a sharp mid-month selloff in gold. There was also talk of an end to “the super cycle” in commodity prices.
“Financial market concern over the outlook for commodity markets was overblown mid-month,” says Patricia Mohr, Scotiabank’s vice president of economics, and commodity market specialist.
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She adds, “While China’s GDP slowed to 7.7% year-over-year in Q1 2013, down from 7.9% in Q4 2012, actual demand for raw materials was robust in China.”
What’s more, the double-digit growth of China’s passenger car market—up 20% in Q1 2013—reinforces its importance as a driver of growth in worldwide auto demand and related commodities like copper.
The bank’s index report finds:
- world potash shipments have begun to pick up after order deferrals last year;
- there’s been a rebound in U.S. oil prices in May. They were lifted by optimism for a stronger pace of U.S. economic growth as 2013 unfolds;
- liquefied natural gas could be a transportation fuel in trucking and for railway locomotives; and
- the U.S. Department of Agriculture expects record-sized corn and soybean crops in 2013 and 2014.
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