The Scotiabank Commodity Price Index declined 2.6% month over month in June. Industrial commodities fell during this time, led by the oil & gas and metals & minerals sub-indices.

As well, crude oil prices reached their lowest level of the year in June, and virtually all industrial metals posted quarter-on-quarter losses. Oil market fundamentals are still expected to tighten through 2018, but WTI price forecasts have been lowered to $51 in 2017 and $53 in 2018.


“Some of the declines [in June] reflected a true deterioration of fundamentals, as is the case with nickel, but we believe that the fallback in oil is an overreaction to an admittedly uninspiring string of high-frequency data,” says Rory Johnston, commodity economist at Scotiabank.

“We remain optimistic, however, and see most commodities gaining through 2017 and 2018 on the back of a global economy that continues to strengthen as well as a gradual reversal of U.S. dollar strength,” he adds.

Index highlights

  • OPEC+ agreement compliance remains high. So, continued production discipline through the March 2018 extension is expected.
  • The natural gas outlook has slightly weakened on the risk that supply gains temporarily outstrip demand in the second half of 2017, and Henry Hub prices are now expected to average $3.10/MMBtu in 2017 and $2.95 in 2018.
  • Zinc’s outlook remains promising and prices staged a mid-June comeback, rallying to roughly $1.25/lb from a year-to-date low of $1.10 reached earlier that month.
  • Nickel’s fortunes have dimmed since last quarter and prices are now forecast to average $4.40/lb in 2017 and $5.00/lb in 2018.
  • Iron ore prices have fallen precipitously to around $55/t from a mid-February peak of $95/t.
  • Gold prices have firmed over the last quarter on the back of falling yields and a weaker dollar; the forecast has been updated to $1,225/oz in 2017 and $1,250/oz in 2018 to reflect this strength.

Read the full Scotiabank Commodity Price Index.