COMMODITY PRICE MONITOR October 19, 2018

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1 COMMODITY PRICE MONITOR SEPTEMBER 218 RBC commodity price index January 1994 = Index excluding energy product prices January 1994 = Energy products sub-index January 1994 = 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 sub-indices is determined by its share of exports and is updated annually in February. COMMODITY PRICE MONITOR October 19, 218 Commodity price index fell modestly in September The RBC commodity price index fell.% in September marking the third consecutive decline, resulting in the index falling.% in third quarter. The September drop was due to widespread weakness across sub-indices with the exception of energy products. The continued slide in the forest products subindex led declines in the month and quarter. Despite the recent weakness, the overall index was 1.% higher than a year earlier reflecting the 18.9% pickup in energy prices since the end of 217. The index ex-energy fell 2.8% in September and was down 8.4% from Q2. The energy products sub-index rose 2.% in September and almost fully recovered August s drop. Crude oil prices rose back to May 218 levels, which were the highest since November 214. This could be in part due to the market taking into consideration the impact on supply from Iranian oil sanctions effective in November. 1 A warmer-than-normal September triggered increased natural gas demand. 2 On a quarterly basis the energy products sub-index stood.2% higher than Q2 and was.% higher than a year earlier in September. The agricultural products sub-index fell 2.9% in September. The subindex is 7.% lower in Q/218 with price declines in every subcomponent. Since the start of the year, the agriculture products sub-index is down 11.%. The forest products sub-index dropped 6.% in September continuing the recent slide that started in July. Lumber prices fell 11.6% in September despite hurricane Florence touching down in the U.S. Lumber prices though lower than the May 218 record levels, remain at historically elevated levels. The sub-index is still 2.7% higher than in January 217. The non-precious metals & minerals sub-index fell 1.% in September as base metal prices remained under pressure. Nickel prices declined most in the sub-index, falling to their lowest level since the end of 217. On a quarterly basis, the sub-index was down 6.2% in Q/218. The precious metals sub-index fell a modest.6% in September, for a fifth consecutive month. Gold prices declined to a near two-year low. On a quarterly basis the precious metal sub-index fell 7.4% in Q/218. Joseph Allegritti Research Associate joseph.allegritti@rbc.com

2 COMMODITY PRICE PRICE MONITOR MONITOR June SEPTEMBER RBC commodity price sub-indices Agricultural products sub-index Forest products sub-index 22 January 1994 = 2 January 1994 = Non-precious metals & minerals sub-index January 1994 = Precious metals sub-index January 1994 = Period averages Q1-18 Q2-18 Q-18 Jul-18 Aug-18 Sep-18 Indices RBC commodity price index Month-over-month/quarter-over-quarter % change Year-over-year % change RBC commodity price index ex. energy Month-over-month/quarter-over-quarter % change Year-over-year % change Sub-indices Agricultural products Month-over-month/quarter-over-quarter % change Year-over-year % change Energy products Month-over-month/quarter-over-quarter % change Year-over-year % change Forest products Month-over-month/quarter-over-quarter % change Year-over-year % change Non-precious metals & minerals Month-over-month/quarter-over-quarter % change Year-over-year % change Precious metals Month-over-month/quarter-over-quarter % change Year-over-year % change

3 COMMODITY PRICE MONITOR SEPTEMBER 218 Commodity prices trends Agricultural products Barley Canola Corn Wheat Potatoes US$ per pounds 19 Live cattle US$ per Live hogs US$ per Fresh salmon US$ per kilogram

4 COMMODITY PRICE PRICE MONITOR MONITOR June SEPTEMBER Energy products Coal Forest products Lumber US$ per 1, board feet Crude oil (WTI) Newsprint US$ per barrel Source: Bloomberg, RBC Economics Research 1 Natural gas US$ per million British thermal units 1 Pulp Source: Bloomberg, RBC Economics Research Precious metals Gold US$ per troy ounce 4 Silver US$ per troy ounce

5 COMMODITY PRICE MONITOR SEPTEMBER 218 Non-precious metals & minerals Aluminum 1. Copper Iron ore Lead Nickel Potash Uranium Zinc

6 COMMODITY PRICE PRICE MONITOR MONITOR June SEPTEMBER Agricultural products Period averages Q1-18 Q2-18 Q-18 Jul-18 Aug-18 Sep-18 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 Energy Coal (US $/tonne) Year-over-year % change Crude Oil (US $/barrel) Year-over-year % change Natural Gas (US $/mmbtu) Year-over-year % change Forest products Lumber (US $/ 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; * latest potato & salmon price based on percent change in BLS PPI index 6

7 COMMODITY PRICE MONITOR SEPTEMBER 218 Non-precious metals & minerals Period averages Q1-18 Q2-18 Q-18 Jul-18 Aug-18 Sep-18 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 Precious metals Gold (US $/ounce) Year-over-year % change Silver (US $/ounce) Year-over-year % change Source: Haver Analytics, Bloomberg, RBC Economics Research 1,2 U.S. Energy Information Administration, Short-Term Energy Outlook, October 218. RBC Capital Markets, Forest Products, October 1, 218. 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. 7