3 RBC commodity price index January 1994 = 24 21 18 Index excluding energy product prices January 1994 = 7 6 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 November 22, 217 Commodity price index climbed again in October The RBC commodity price index rose 2.8% in October, stringing together four consecutive monthly gains. The overall index was 1.9% higher yearover-year in October and was up 6.3% since the start of the year. October s monthly strength was due to price gains in all sub-indices except precious metals. The index ex. energy modestly outperformed the overall index and climbed 3.% in October and was 16.3% higher than in October 216. The energy products sub-index climbed 2.4% in October. Crude oil prices rose 3.6% in October and reached a 7-month high. Robust global economic data continued to support the idea that oil demand will remain strong and in addition to this, some OPEC members have announced their support to extend the current supply reduction agreement. 1 Coal prices continued their upward trajectory and reached the highest level in over a year. Coal prices are up 16% since the start of 217. The agricultural products sub-index rose a modest 1% in October following back-to-back monthly declines of more than 4%. Compared to a year earlier the sub-index was 13.1% higher. Monthly results among subcomponents were mixed. A notable change in October was in wheat prices that found some footing and ceased a two month slide. The forest products sub-index surged 11.3% higher October, the largest monthly increase in almost a year. Beginning in early 217 the sub-index has been on an upward trajectory and stood 23.8% higher year-over-year. Lumber prices swelled in October as increased demand and a supply shortage due to the devastating BC forest fires pushed prices to their highest level in over a decade. 2 The North American lumber dispute saga continued to be unresolved as did the NAFTA re-negotiations. The non-precious metals & minerals sub-index was mostly flat in October after rising strongly in Q3. The price gains across the sub-components were modest in October for all but iron ore prices which dropped 13.8%. In an attempt to control pollution, the Chinese government announced intentions to limit steel production, which hampered iron ore prices in October. 3 The precious metals sub-index fell 2.7% in October and fully retraced the 2.% gain in September. Both gold and silver prices were lower in October as equity markets globally had a strong month and investors seemed less concerned with about market uncertainty. Joseph Allegritti Research Associate 416-974-84 joseph.allegritti@rbc.com
COMMODITY PRICE MONITOR OCTOBER 217 Agricultural products sub-index RBC commodity price sub-indices Forest products sub-index 22 January 1994 = January 1994 = 14 13 17 11 12 9 8 7 Non-precious metals & minerals sub-index January 1994 = Precious metals sub-index January 1994 = 3 Period averages 214 21 216 Q1-17 Q2-17 Q3-17 Aug-17 Sep-17 Oct-17 Indices RBC commodity price index 267. 179. 171.1 19. 192.8 196.3 196.8 199.9 2. Month-over-month/quarter-over-quarter % change 4.9-1.1 1.9 2.3 1.6 2.8 Year-over-year % change -4.1-32.8-4.7 31.3 11.9 1. 1.4 12.8 1.9 RBC commodity price index ex. energy 182.3 16.8 1.1 167.8 171.1 17.9 176.9 177. 182.9 Month-over-month/quarter-over-quarter % change.6 1.9 2.9 2.1.3 3. Year-over-year % change -.8-14. -1.1 14.7 9. 1.7 1.4 13.6 16.3 Sub-indices Agricultural products 141.1 121.9 112.8 118.3 122. 13.6 13.6 124.6 12.8 Month-over-month/quarter-over-quarter % change 4.1 3.1 7.1-4. -4.6 1. Year-over-year % change -6.8-13.6-7.4 6.9 3.3 19.9 18.7 18.8 13.1 Energy products 32.8 191.1 172.9 28.2 197. 197.7 197.2 23.9 28.8 Month-over-month/quarter-over-quarter % change 3.3 -.4.4 2.7 3.4 2.4 Year-over-year % change -3. -4.8-9..4 13. 8. 8.8 1.1 2.7 Forest products 129.7 11. 117.3 129.6 141.1 136.3 13. 13.7 11.1 Month-over-month/quarter-over-quarter % change 7.1 8.9-3.4-1..2 11.3 Year-over-year % change 1.6-14.8 6.2 21.3 18.6 11.3 9.6 12.4 23.8 Non-precious metals & minerals 222.7 18.3 168.1 19. 18. 193.2 196.6 199. 199.7 Month-over-month/quarter-over-quarter % change 7.8 -.3 7.3 7.2 1..1 Year-over-year % change -7.7-16.8-9.3 17.3 8.7 14.7 1. 2.3 19. Precious metals 323.7 293.8 316.7 31.9 319.1 322.8 324.1 332.1 323.3 Month-over-month/quarter-over-quarter % change.2 2.6 1.2 3.9 2. -2.7 Year-over-year % change -11.4-9.2 7.8 4.8.1 -.4 -.4-2..4 2
Commodity prices trends Agricultural products COMMODITY PRICE MONITOR OCTOBER 217 Barley Barley Corn Wheat 3 7 6 4 Potatoes Live cattle 16 US$ per pounds 19 US$ per 14 17 12 13 1 11 8 9 6 7 Live hogs Fresh salmon US$ per US$ per 1 9. 9 8. 8 7. 7 6. 6. 4 4. 3 3. 3
COMMODITY PRICE MONITOR OCTOBER 217 Energy products Coal Commodity price trends Forest products Lumber US$ per 1, board feet 4 16 3 8 4 Crude oil (WTI) Newsprint US$ per barrel 8 7 9 6 6 3 Source: Bloomberg, RBC Economics Research Natural gas Pulp US$ per million British thermal units 1 1 12 1 9 9 6 8 3 7 6 Source: Bloomberg, RBC Economics Research Precious metals Gold Silver US$ per troy ounce US$ per troy ounce 4 17 3 1 2 1 8 1 1-yearaverage 4
Commodity price trends COMMODITY PRICE MONITOR OCTOBER 217 Non-precious metals & minerals Aluminum Copper 1. 1.3 4 1.1 3.9.7 2. 1 Iron ore Lead 1.8 16 1.4 1. 8 4.6.2 Nickel Potash 2 9 1 7 1 1-yearaverage Uranium Zinc 1. 8 1.2 6.9 4.6 2.3.
COMMODITY PRICE MONITOR OCTOBER 217 Commodity price trends Period averages 214 21 216 Q1-17 Q2-17 Q3-17 Aug-17 Sep-17 Oct-17 Agricultural products Barley (US $/tonne) 138.2 194.3 18. 137.2 137.7 143.3 14. 14.. Year-over-year % change -31.7 4.6-18.4-2.1-2..4.1 7.. Canola (US $/tonne). 37.7 366. 386.8 382. 47.6 399.2 41. 39.7 Year-over-year % change -26.6-7.3-1.3 13. -1.9 14.8 12.7 13.9 7.2 Corn (US $/tonne) 192.9 169.8 19.2 16.6 17.7 11.1 148. 147.3 148.6 Year-over-year % change -2.6-12. -6.2.4-7.8-1. -1.1 -.8-2.4 Wheat (US $/tonne) 319. 22.7 221.9 24. 249.6 286.8 279.2 263.3 27.1 Year-over-year % change -2. -2.8-12.2 1.7 12.1 36.4 3. 27.4 13.6 Potatoes (US $/cwt)* 9.4 8.84 9.4 8.84 9.38 11.3 12.68 11.91 9.96 Year-over-year % change -4.6-2.3 2.3 -.6-6.6 2.4 39.8.2 3.1 Live cattle (US $/cwt) 12.8 147.9.1.3 132. 113. 114. 1. 19. Year-over-year % change 22.6-3.2-18.8-9.1 3.1-1. -2.6-2.8 7.9 Live hogs (US $/cwt) 77.1 3. 49.6 1.8 4.7 9.2 61. 48.9 47.6 Year-over-year % change 14.7-3.6-7.3 8.6-2.8 11.2 16.9 2.3 13.8 Fresh salmon (US $/kg)* 6.6.31 7.1 7.91 7.8 6.7 6. 6.4 8.6 Year-over-year % change -2.4-19.6 34.8 21.8 6.1-7. -7.9-4. 19.3 Energy Coal (US $/tonne) 7.1 7. 6.9 81.6 8. 93.4 9.9 96.9 97.1 Year-over-year % change -17.1-18. 14. 6.2 4.4 38.4 42.3 32.9 4.3 Crude Oil (US $/barrel) 93.3 48.7 43.2 1.8 48.3 48.2 48.1 49.8 1.6 Year-over-year % change -4.8-47.7-11.3.4 6.2 7.3 7.4 1.2 3.6 Natural Gas (US $/mmbtu) 4.37 2.61 2.49 3.1 3.8 2.9 2.9 2.98 2.88 Year-over-year % change 17.2-4.2-4.6. 43. 2.7 2.8 -.3-3.4 Forest products Lumber (US $/ board ft) 349.7 277.3 33.8 347.8 387.2 363.1 36.4 36.6 422. Year-over-year % change -1.7-2.7 9. 3.1 24.1 13.1 1.6 1. 32.4 Newsprint (US $/tonne) 81.1 33.9 39.4 2.8 47.1 44.4 44. 43.8 47.9 Year-over-year % change -2.8-8.1 1. 6.6 2.3 -.9-1.3-1.7-1.1 Pulp (US $/tonne) 123. 97.2 974.9 113.6 178.8 112.4 1. 11.1 1129.7 Year-over-year % change 9. -4.7. 7.4 11. 1.9 1.6 11. 13.2 Source: Haver Analytics, Bloomberg, RBC Economics Research; * latest potato & salmon price based on percent change in BLS PPI index 6
Commodity price trends COMMODITY PRICE MONITOR OCTOBER 217 Non-precious metals & minerals Period averages 214 21 216 Q1-17 Q2-17 Q3-17 Aug-17 Sep-17 Oct-17 Aluminum (US $/lb).8.7.73.84.87.91.92.9.97 Year-over-year % change 1.2-11. -3.4 22.1 21. 24.2 23.7 32.1 28. Copper (US $/lb) 3.11 2.49 2.21 2.64 2.7 2.88 2.94 2.99 3.8 Year-over-year % change -6.3-19.9-11. 24.8 19.7 33. 36.1 39.9 43.6 Iron Ore (US $/tonne) 97..9 8.4 8.8 63.4 71.8 76.1 71. 61.7 Year-over-year % change -28.4-42.4 4.6 77.7 13.2 22.4 24.9 23.8 4.3 Lead (US $/lb).9.81.8 1.3.98 1.6 1.7 1.8 1.14 Year-over-year % change -2.2-14.8 4.7 3.8 2.9 24.7 28.2 22.4 22.9 Nickel (US $/lb) 7.6.3 4.36 4.66 4.18 4.77 4.92.9.13 Year-over-year % change 12.4-3. -18.6 2.8 4.6 2.6 4.8 1.3 1.3 Zinc (US $/lb).98.87.9 1.26 1.18 1.34 1.3 1.41 1.48 Year-over-year % change 13.4-1.9 8.6 6.6 3.4 31.4 3.6 36.1 41. Potash (US $/tonne) 297.2 32.9 24.6 214.3 216. 217. 217. 216. 222. Year-over-year % change -21.6 1.9-18.9-24.3-17.9-1.8-1.4. 2.8 Uranium (US $/lb) 33. 36.8 26.3 23.9 21.. 21.1 21.9 22.6 Year-over-year % change -13.2 9.8-28.4-26.7-22.. -1.4. 2.8 Precious metals Gold (US $/ounce) 126.9 118.8 1.1 1219. 127.3 1278.2 1283. 1314.1 1279. Year-over-year % change -1.3-8. 7.9 3.1 -.3-4.2-4.3 -.9 1. Silver (US $/ounce) 19.1 1.7 17.2 17. 17.2 16.9 17. 17.4 16.9 Year-over-year % change -19.9-17.7 9.4 17.1 1.8-14.2-13. -9.8-4. Source: Haver Analytics, Bloomberg, RBC Economics Research 1 U.S. Energy Information Administration, Short-Term Energy Outlook, November 217. 2 RBC Capital Market, Paper, Packaging & Forest Products, October 8, 217. 3 RBC Capital Market, Bulking-Up, October 18, 217. 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