Commodities prices down sharply in October, uranium recovers

HONG KONG - Global commodity prices fell sharply in October, continuing a four-month run of declining prices. HSBC says its indicator suggests that the IMF commodity price index is likely to have fallen by-7% over the month, taking the decline over the past three months to 16%.

The most recent fall was in large part due to lower oil prices, HSBC says, although there was weakness across other energy commodities and metals. Prices have fallen as a result of both strong supply and weakening demand. Commodity prices are currently 30% lower than their 2011 peaks, but 85% higher than their 1990s average in real terms.

Brent, Dubai and WTI oil prices fell by 10% in October, and metals prices were generally lower. The largest mover was nickel, which was down-12% in the month, as it has been impacted by global growth concerns.

 Iron ore prices fell by another 2.5% in October, to be down 41% since the beginning of the year. Nonetheless, the major producers, which are also lowest cost producers, continue to push ahead with boosting production, seemingly happy to focus on increasing market share and putting pressure on higher-cost producers,” HSBC says.

The only major metal to record higher prices in October was uranium (up 3.2%), where prices have started to recover as Japan takes the first steps towards restarting its nuclear power plants. www.hsbc.com (ATI).