TORONTO, ON - April 29, 2015 /CNW/ - After rallying in February, Scotiabank's Commodity Price Index dropped by 3.7% in March, as oil prices retreated once again. The All Items Index is at its lowest level since January 2007 and is 32.8% below a year earlier.

"The good news is a spring rally has emerged in April, with price gains for oil and base metals," said Patricia Mohr, Vice President of Economics and Commodity Market Specialist at Scotiabank. "West Texas Intermediate (WTI) oil prices have rallied back over US$57 in late April, as U.S. Department of Energy data indicates that U.S. shale oil production levelled out at about 5.618 million barrels per day (mb/d) in April and may edge down to 5.561 mb/d in May.

"London Metal Exchange (LME) zinc prices have spurted to US$1.04 per pound, with traders and institutional investors anticipating a coming deficit in zinc concentrates. Century in Australia -- the world's third-biggest zinc mine -- and Lisheen in Ireland will close in the third quarter due to mine depletion, cutting world supplies by almost 5%.

"During Prime Minister Narendra Modi's April visit to Canada, Cameco signed a landmark 5-year agreement to supply 7.1 million pounds of U₃O₈ (uranium concentrates) to the Department of Atomic Energy of India through 2020. The contract will enable Cameco to establish itself in the world's second-fastest growing uranium market."

Other highlights from the report include:

• A slow uranium price recovery is anticipated over the balance of the decade, as the current global surplus of supplies over demand recedes.
• Western Canada's oil and gas producers plan to pare their capital spending by about 35% in 2015 to shore up balance sheets during a period of low oil prices.
• The U.S. will likely allow the Canada-U.S. Softwood Lumber Agreement to expire in October 2015, given calls for renegotiation by some U.S. producers.

Read the full Scotiabank Commodity Price Index online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

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