- NAB updates commodity market outlook - Base metals and bulk prices should remain supported this year but ease in 2012 - Oil price expected to stabilise, modest decline likely in gold price

By Chris Shaw

An easing in most non-rural commodity prices in May has been followed by subdued price growth in June, National Australia Bank attributing this to the market's focus on the possible implications for global demand in case of a debt default by the Greek government.

As well, the bank's Australia and commodities analyst Ben Westmore suggests economic data over the past few months have shown some weakness, as developing economies have struggled against headwinds and policy tightening in developing nations has begun to impact on activity levels.

This means while production continues to grow in nations such as China, the pace of this growth is slowing. Westmore also notes the earthquake and aftermath in Japan have impacted the Japanese supply train, with the effect being felt across Japan's major trading partners.

Looking forward, Westmore expects non rural commodity prices will remain at high levels through the remainder of this year, though an easing in supply constraints is likely to see some moderation in bulk commodity prices.

Westmore anticipates the NAB Non-Rural Commodity Price Index will rise by around 22% in US dollar terms this year, before a decline of around 8% in 2012.