2010 Commodities Bull Strides into 2011


"Copper was a star performer of the metals and minerals sector."

Commodities ended 2010 on a high note, which is good news for resource companies heading into 2011.

According to a Scotiabank commodity price index report released Thursday, price trends in 32 of Canada's major exports jumped 5.5% in December over the prior month—and the trend has continued into 2011 with China's continuing demand for natural resources. "While prices retreated on January 20 after news China's GDP grew by a faster-than-expected 9.8% in Q410, up from 9.6% in Q3. . .we continue to believe China's economy will expand at a healthy clip in 2011," said Scotiabank Economics VP Patricia Mohr.

For the metals and minerals sector, star performers were copper, uranium and coal.

Copper prices hit an all-time high of US$4.44/lb. on January 19—a 15% rise over spot in early December.

Uranium prices also continued to climb, hitting US$70/lb. this month on thin spot market availability, Scotiabank said.

Uranium prices have been on an upward trend for months now as governments around the world, including China, look to the commodity as a source for clean nuclear power.

Scotiabank expects contract prices for coking coal, of which BC is a major producer, could jump as high as US$300/ton in the second quarter of 2011.

Mohr believes extreme flooding in Australia's Queensland region, known for its massive exports of metallurgical coal, will continue to constrain the market and drive prices upward.

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