What are industrial commodities?
Industrial commodities are collective goods that can be traded on the industrial market, often through regulated commercial commissions or exchanges. Common types of industrial commodities include metal ore, fossil fuels, textiles and food. In some cases, goods produced than raw materials can also be considered. Trading and exchange of industrial commodities is a central factor in regional and global economies and for some investors can be a primary focus.
In most markets, trading in industrial commodities is central for the production and availability of goods. Creating central exchanges for certain types of commodities allows all potential buyers and sellers to access the market to a group of goods and can also help create quality standards. Most industrial commodities are goods that are similar or identical regardless of the source; For example, copper ore, which is considered a commodity, will have the same chemical substance metallurgical properties, regardless of source and methodextraction. Industrial commodity homogeneity makes it possible to set the market price for each type of raw goods that can freely fluctuate based on the level of supply and demand than for quality differences in good.
There are many different types of industrial commodities. Building blocks of industry, commodities provide raw materials that allow the creation of produced goods or operation of factories and industrial plants. Metal commodities may include both basic and precious metals such as iron, aluminum, gold and silver. Fossil fuels, such as coal, oil and oil, form a huge segment of industrial commodities market, as most industries require fuel for transport and operation. Textiles such as cotton or wool, and raw foods such as fruit or meat on important commodities for the commercial industry.
Some produced goods can also be considered industrial commodities, but factors influencing pricesThey can be more complex than raw materials. For example, wooden pulp is a critical commodity in the paper industry, but paper products can also be considered commodities in certain markets. Similarly, while raw wool or cotton can be a commodity, knitted or printed screws qualify as produced goods and raw components of clothing and upholstered industries. Business stock exchanges often try to divide the commodities into simple, narrow categories so that homogeneity can be maintained as close as possible.
Business exchanges oversee the movement of industrial commodities from the supplier to the buyer and are often firmly regulated to ensure justice, legality and quality standards. However, not all commodities are sold by huge exchanges; Purchase of oranges on the farmer's market is one simple form of commodity exchange in the food industry. Official trade exchanges called commodity ETF or ETN tend to focus on goods in a particular sector such as agricultural goods or ROPO marketat.