COMMODITY PRICE MONITOR

RBC commodity price index September 15, 2017

January 1994 = 100

400
Commodity price index climbed in August
350
The RBC commodity price index rose 2.4% in August building on the 3.6%
300 gain in July. Despite the recent gains, the overall index has held relatively
250 steady thus far through 2017. However, the index was 11.5% higher year-over
-year in August. Augusts monthly strength in part reflected gains in precious
200
and non-precious metals along with energy products sub-indices. Notably, a
150 rebound in precious metals pulled the index higher in the month as political
100 uncertainty drove investors into safe assets. The index ex. energy also con-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
tinued to rise in August despite a slight fall in the forest products sub-index.
Monthly average
The index excluding energy products was 12.4% higher year-over-year since
Source: RBC Economics Research
August 2016.
The energy products sub-index climbed 2.7% in August although was still
Index excluding energy product prices lower than at the start of 2017. Average crude oil prices rose 3% in August,
January 1994 = 100
240
though most of the price gains were experienced at the beginning of the
month before hurricane-related disruptions occurred. Lower demand for
210
crude at refineries in the hurricane affected regions lowered prices at
months end.1 Coal prices have continued their recent recovery and stood
180 15% higher since the start of 2017 and 42% higher year-over-year. The en-
ergy products sub-index was 8.8% higher year-over-year in August.
150 The agricultural products sub-index fell 4.6% in August and recorded its
largest decline in over a year. Year-over-year the sub-index was 18.8%
120
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
higher. Monthly price weakness was led by wheat prices falling 12%. How-
Monthly average
ever wheat prices were still 30% higher year-over-year with lower forecast-
Source: RBC Economics Research
ed global wheat supplies for 2017 providing some of the upward price pres-
sure.2 Notably, Canadian 2017 production estimates of wheat and canola
were reported by Statistics Canada to be nearly 20% and 7% lower than in
Energy products sub-index
January 1994 = 100
2016.3
700 The forest products sub-index fell modestly in August. Despite Augusts
600
weakness, since the start of 2017 the sub-index remained on an upward tra-
jectory. Forest products prices were 16% higher year-over-year in August.
500
There was a fall in monthly lumber prices (-2%) as the period for counter-
400 vailing duties on Canadian lumber exported to the U.S. expired on August
300 25th. As of that date only anti-dumping duties will continue to be charged
on Canadian lumber by the U.S. as NAFTA negotiations continue.4 It re-
200
mains to be seen how hurricane-related demand for Canadian lumber will
100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
affect prices in September.
Monthly average The non-precious metals & minerals sub-index surged 7.2% in August,
Source: RBC Economics Research making it two consecutive monthly gains with a 4.5% rise in July. The
break from the downward trend was widespread across the sub-components.
A recovery to November 2014 levels of aluminum prices helped pull the
RBCs commodity price index is a Fisher chain-weighted
index of spot or transaction prices of 24 of the top ex- sub-index higher in August. In addition, the continued climb in iron ore
ported Canadian-produced commodities. The weight of prices based on strong Chinese demand helped increase the sub-index in the
each commodity in the overall index and various sub- month.5
indices is determined by its share of exports and is updat-
ed annually in February.
The precious metals sub-index rose 3.9% in August. Both gold and silver
prices were higher in August. Gold prices climbed 3.7% higher in the
Joseph Allegritti month due to a rise of global political uncertainty as investors looked for
Research Associate shelter. Despite the strength in the month, both gold and silver remained
416-974-5845 below last years prices with gold down 4.3% and silver down 13.5%.
joseph.allegritti@rbc.com
COMMODITY PRICE MONITOR | August 2017
RBC commodity price sub-indices
Agricultural products sub-index Forest products sub-index
January 1994 = 100 January 1994 = 100
225 150

140
200
130

120
175
110
150 100

90
125
80

100 70
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average Monthly average

Source: RBC Economics Research Source: RBC Economics Research

Non-precious metals & minerals sub-index Precious metals sub-index

January 1994 = 100 January 1994 = 100
400 500

350
400
300

250 300

200
200
150

100 100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average Monthly average

Source: RBC Economics Research Source: RBC Economics Research

Period averages
2014 2015 2016 Q4-16 Q1-17 Q2-17 Jun-17 Jul-17 Aug-17
Indices
RBC commodity price index 267.0 179.5 171.1 185.8 195.0 192.8 187.5 194.2 198.8
Month-over-month/quarter-over-quarter % change 4.6 4.9 -1.1 -2.6 3.6 2.4
Year-over-year % change -4.1 -32.8 -4.7 15.3 31.3 11.9 4.4 9.3 11.5

RBC commodity price index ex. energy 182.3 156.8 155.1 158.8 167.8 171.1 169.7 176.3 180.1
Month-over-month/quarter-over-quarter % change 0.0 5.7 1.9 -0.4 3.9 2.1
Year-over-year % change -5.8 -14.0 -1.1 9.2 14.7 9.5 7.7 10.2 12.4
Sub-indices
Agricultural products 141.1 121.9 112.7 113.1 118.3 122.0 128.5 136.7 130.4
Month-over-month/quarter-over-quarter % change 4.0 4.6 3.1 6.0 6.4 -4.6
Year-over-year % change -6.8 -13.6 -7.6 0.6 6.9 3.3 7.3 22.2 18.8

Energy products 352.8 191.1 172.9 201.7 208.2 197.0 186.3 192.0 197.2
Month-over-month/quarter-over-quarter % change 10.7 3.3 -5.4 -5.7 3.1 2.7
Year-over-year % change -3.0 -45.8 -9.5 23.1 55.4 13.5 -1.4 6.6 8.8

Forest products 129.7 110.5 117.3 121.0 129.6 141.1 137.4 145.7 143.7
Month-over-month/quarter-over-quarter % change -1.1 7.1 8.9 -2.8 6.0 -1.3
Year-over-year % change 1.6 -14.8 6.2 14.7 21.3 18.6 13.2 18.6 16.2

Non-precious metals & minerals 222.7 185.3 168.1 176.3 190.0 180.0 175.5 183.4 196.6
Month-over-month/quarter-over-quarter % change 4.7 7.8 -5.3 -2.1 4.5 7.2
Year-over-year % change -7.7 -16.8 -9.3 6.6 17.3 8.7 6.8 8.4 15.5

Precious metals 323.7 293.8 316.7 310.2 310.9 319.1 319.0 312.0 324.1
Month-over-month/quarter-over-quarter % change -9.1 0.2 2.6 1.1 -2.2 3.9
Year-over-year % change -11.4 -9.2 7.8 11.0 4.8 0.1 -1.4 -8.9 -5.4

ECONOMICS | RESEARCH

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 COMMODITY PRICE MONITOR | August 2017
Commodity prices trends
Agricultural products
Barley Canola
US$ per tonne US$ per tonne
300 700

250 600

200 500

150 400

100 300

50 200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Corn Wheat
US$ per tonne US$ per tonne
350 750

300
600

250
450
200

300
150

100 150
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Potatoes Live cattle

US$ per 100 pounds US$ per 100 pounds
14 190

170
12
150

10 130

110
8
90

6 70
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Live hogs Fresh salmon

US$ per 100 pounds US$ per kilogram
105 9.50

95 8.50

85
7.50
75
6.50
65
5.50
55

45 4.50

35 3.50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

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COMMODITY PRICE MONITOR | August 2017
Commodity price trends
Energy products Forest products
Coal Lumber
US$ per tonne US$ per 1,000 board feet
200 450

160
350

120

250
80

40 150
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthl y average 10-year aver age

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Crude oil (WTI) Newsprint

US$ per barrel US$ per tonne
150 800

120 700

90 600

60 500

30 400
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly aver age 10-year aver age Monthly average 10-year aver age

Source: Haver Analytics, RBC Economics Research Source: Bloomberg, RBC Economics Research

Natural gas Pulp

US$ per million British thermal units US$ per tonne
15 1200

1100
12

1000
9
900
6
800

3
700

0 600
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year aver age Monthly average 10-year aver age

Source: Haver Analytics, RBC Economics Research Source: Bloomberg, RBC Economics Research

Precious metals
Gold Silver
US$ per troy ounce US$ per troy ounce
2000 45

1700
35

1400
25
1100

15
800

500 5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthl y average 10-year average Monthl y average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

ECONOMICS | RESEARCH

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 COMMODITY PRICE MONITOR | August 2017
Commodity price trends
Non-precious metals & minerals
Aluminum Copper
US$ per pound US$ per pound
1.50 5

1.30
4

1.10
3
0.90

2
0.70

0.50 1
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthl y average 10-year average Monthl y average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Iron ore Lead

US$ per tonne US$ per pound
200 1.80

160
1.40

120
1.00
80

0.60
40

0 0.20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Nickel Potash
US$ per pound US$ per tonne
20 900

15 700

10 500

5 300

0 100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

Uranium Zinc
US$ per pound US$ per pound
100 1.50

80 1.20

60 0.90

40 0.60

20 0.30

0 0.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthl y average 10-year average Monthly average 10-year average

Source: Haver Analytics, RBC Economics Research Source: Haver Analytics, RBC Economics Research

ECONOMICS | RESEARCH

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COMMODITY PRICE MONITOR | August 2017
Commodity price trends
Period averages
2014 2015 2016 Q4-16 Q1-17 Q2-17 Jun-17 Jul-17 Aug-17

Agricultural products
Barley (US $/tonne) 138.2 194.3 158.5 136.2 137.2 137.7 138.0 140.0 145.0
Year-over-year % change -31.7 40.6 -18.4 -27.1 -25.1 -20.0 -19.5 -9.7 5.1

Canola (US $/tonne) 400.0 370.7 366.0 378.8 386.8 382.0 385.1 422.0 399.2
Year-over-year % change -26.6 -7.3 -1.3 7.4 13.5 -1.9 -2.4 17.8 12.7

Corn (US $/tonne) 192.9 169.8 159.2 152.2 160.6 157.7 157.9 157.5 148.5
Year-over-year % change -25.6 -12.0 -6.2 -9.0 0.4 -7.8 -12.2 -2.6 -1.1

Wheat (US $/tonne) 319.0 252.7 221.9 237.9 240.0 249.6 278.5 317.9 279.2
Year-over-year % change -2.0 -20.8 -12.2 1.8 10.7 12.1 24.4 51.8 30.0

Potatoes (US $/cwt)* 9.04 8.84 8.93 8.02 8.84 9.38 9.24 9.31 12.68
Year-over-year % change -4.6 -2.3 1.1 0.9 -0.6 -6.5 -12.2 -2.8 42.0

Live cattle (US $/cwt) 152.8 147.9 120.1 105.3 120.3 132.0 132.0 120.0 113.0
Year-over-year % change 22.6 -3.2 -18.8 -16.6 -9.1 3.1 5.6 0.8 -3.4

Live hogs (US $/cwt) 77.1 53.5 49.6 41.3 51.8 54.7 62.1 67.3 61.4
Year-over-year % change 14.7 -30.6 -7.3 -14.1 8.6 -2.8 2.5 13.3 16.6

Fresh salmon (US $/kg)* 6.60 5.31 7.15 7.46 7.91 7.85 8.10 7.20 6.50
Year-over-year % change -2.4 -19.6 34.8 41.4 21.8 6.1 5.2 -10.1 -7.9

Energy
Coal (US $/tonne) 70.1 57.5 65.9 93.2 81.6 80.0 81.0 87.5 95.9
Year-over-year % change -17.1 -18.0 14.5 78.0 60.2 54.4 52.2 40.5 42.4

Crude Oil (US $/barrel) 93.3 48.7 43.2 49.2 51.8 48.3 45.2 46.6 48.1
Year-over-year % change -4.8 -47.7 -11.3 17.1 55.4 6.2 -7.4 4.3 7.4

Natural Gas (US $/mmbtu) 4.37 2.61 2.49 3.04 3.01 3.08 2.98 2.98 2.90
Year-over-year % change 17.2 -40.2 -4.6 43.4 50.5 43.5 15.1 5.7 2.8

Forest products
Lumber (US $/1000 board ft) 349.7 277.3 303.8 314.9 347.8 387.2 368.4 403.0 395.0
Year-over-year % change -1.7 -20.7 9.5 20.1 30.1 24.1 15.3 24.6 21.2

Newsprint (US $/tonne) 581.1 533.9 539.4 554.5 552.8 547.1 546.1 545.4 544.0
Year-over-year % change -2.8 -8.1 1.0 9.7 6.6 2.3 1.8 0.3 -1.3

Pulp (US $/tonne) 1023.0 975.2 974.9 994.4 1013.6 1078.8 1098.7 1102.0 1100.0
Year-over-year % change 9.5 -4.7 0.0 4.8 7.4 11.5 11.9 11.1 10.6

Source: Haver Analytics, Bloomberg, RBC Economics Research; * latest potato & salmon price based on percent change in BLS PPI index

ECONOMICS | RESEARCH

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 COMMODITY PRICE MONITOR | August 2017
Commodity price trends
Period averages
2014 2015 2016 Q4-16 Q1-17 Q2-17 Jun-17 Jul-17 Aug-17

Non-precious metals & minerals

Aluminum (US $/lb) 0.85 0.75 0.73 0.78 0.84 0.87 0.86 0.86 0.92
Year-over-year % change 1.2 -11.0 -3.4 14.4 22.1 21.5 18.5 16.8 23.7

Copper (US $/lb) 3.11 2.49 2.21 2.39 2.64 2.57 2.59 2.71 2.94
Year-over-year % change -6.3 -19.9 -11.5 7.9 24.8 19.7 23.1 23.1 36.1

Iron Ore (US $/tonne) 97.0 55.9 58.4 70.7 85.8 63.4 57.5 67.7 76.1
Year-over-year % change -28.4 -42.4 4.6 51.1 77.7 13.2 10.6 18.3 24.9

Lead (US $/lb) 0.95 0.81 0.85 0.97 1.03 0.98 0.97 1.03 1.07
Year-over-year % change -2.2 -14.8 4.7 27.9 30.8 25.9 24.3 23.5 28.2

Nickel (US $/lb) 7.65 5.35 4.36 4.90 4.66 4.18 4.05 4.30 4.92
Year-over-year % change 12.4 -30.0 -18.6 14.5 20.8 4.6 0.2 -7.5 4.8

Zinc (US $/lb) 0.98 0.87 0.95 1.14 1.26 1.18 1.17 1.26 1.35
Year-over-year % change 13.4 -10.9 8.6 56.1 65.6 35.4 27.1 27.5 30.6

Potash (US $/tonne) 297.2 302.9 245.6 215.3 214.3 216.0 218.0 218.0 217.0
Year-over-year % change -21.6 1.9 -18.9 -27.5 -24.3 -17.9 -14.8 -4.4 -1.4

Uranium (US $/lb) 33.5 36.8 26.3 19.6 23.9 21.5 19.7 20.4 21.1
Year-over-year % change -13.2 9.8 -28.4 -45.5 -26.7 -22.0 -27.5 -21.4 -18.4

Precious metals
Gold (US $/ounce) 1265.9 1158.8 1250.1 1219.7 1219.5 1257.3 1260.3 1236.8 1283.0
Year-over-year % change -10.3 -8.5 7.9 10.4 3.1 -0.3 -1.3 -7.5 -4.3

Silver (US $/ounce) 19.1 15.7 17.2 17.2 17.5 17.2 16.9 16.2 17.0
Year-over-year % change -19.9 -17.7 9.4 16.1 17.1 1.8 -2.1 -19.2 -13.5

Source: Haver Analytics, Bloomberg, RBC Economics Research

1
U.S. Energy Information Administration, Short-Term Energy Outlook, September 2017.
2
USDA, World Agricultural Supply Estimates, September 12, 2017.
3
Statistics Canada, Production of Principal field crops, August 31, 2017
4
RBC Capital Market, Paper, Packaging & Forest Products, August 13, 2017.
5
RBC Capital Market, Bulking Up, August 23, 2017.

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the copyright holder in writing. The statements and statistics contained herein have been prepared by RBC Economics Research based on information from sources con-
sidered 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
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