A major Canadian bank is predicting better months ahead for copper and oil.
After falling for three consecutive months, Scotiabank’s Commodity Price Index showed a one percent gain in November, boosted by a sharp rebound in oil and firmer base metals prices.
Top 2011 performers in the index, according to Scotiabank, were sulphur, coking coal, potash, and hogs and cattle. Gold came seventh in the index with a 14.6% gain between late 2010 and mid-December of this year.
The bank noted that copper is in a supply deficit situation currently, and is likely to remain so in 2012 even with a 6% increase in world mined copper compared to a meagre 0.4% increase in 2011.
That will continue to put upward pressure on prices, notes Scotiabank commodities market specialist Patricia Mohr, who added that demand in China is likely to pick up soon:
“Much of the recent pickup in refined copper imports into China has reflected stockpiling by property developers for use as collateral for bank credit,” said Mohr. “However, China’s fabrication demand should strengthen again next spring, with prices surging back to US$4. Copper prices could average just under the US$4 mark through much of 2013.”
Mohr is also bullish on oil, pointing to rising prices for Brent crude, which was hovering around $107 a barrel on Thursday:
“One of my top picks is oil because, despite a lot of uncertainty in the global economy, weak performance in the Euro zone and slow growth in United States, oil prices have remained strong,” she told The Halifax Chronicle-Herald.
Zinc prices are also expected to pick up in 2012 and come on strong mid-decade due to dwindling supply, the newspaper reported.
