From The Globe and Mail:

The commodities sector, which has been the main driver of Canada's economic strength and a buffer against the subprime woes of the United States, imploded yesterday, stoking fears that Canada can no longer outrun the global financial crisis.

Metals, mining and oil stocks plunged on fears a widening economic downturn will sap demand around the world for the crude oil, copper and potash produced by Canadian resource companies. ...

At the crux of the currency and stock selling is a sudden reversal of the belief that commodity prices will remain strong despite a potential recession in the United States. Amid fears that Europe and Asia will be unable to escape the contagion, commodity prices are plunging and taking the prospects of Canada's resource-based economy with it.

"There is a declining belief in an extended commodity cycle. Undoubtedly, what we are seeing is some of the momentum investors come out of the commodities as well as the stocks," John Hughes, a mining analyst at Desjardins Securities, said in an interview.

While demand for commodities such as copper, nickel and coal have yet to show significant declines, many traders are betting that the need for resources will fall sharply as the U.S. financial crisis spreads to other countries and crimps global economic growth.