Industrial commodities are excellent choices as trading assets as it enables traders to trade instruments that have an increasing demand for industry use. Many investors choose these assets as a primary investment for various attractive characteristics.
However, choosing and trading the best industrial commodity requires having a certain level of knowledge and skills. This article includes a list of the top ten industrial commodities that are best for trading in 2021.
Let’s check this list by observing various factors such as supply-demand, availability of trading options, etc.
What are industrial commodities?
Commodities are raw materials that are fungible assets; you can purchase commodities with fiat currencies. Commodity trading is not a new concept. Industrial commodities are raw materials that are used to produce several goods or products in industries. Various kinds of industrial commodities include fossil fuels, metal ore, foodstuffs, and textiles. Trading of these types of commodities generally occurs through regulated trading exchanges or commissions.
Metal commodities such as gold, silver, iron, aluminum are very popular and have sufficient demand for industrial use. Energy commodities of fossil fuels such as crude oil, coal, and petroleum have increasing demand as most industries need these for operation and transport purposes. Textile commodities such as wool, cotton, and foodstuffs such as meat, soybeans, or fruits are vital commodities in the commercial marketplace.
Top seven industrial commodities
This part contains the list of the best seven tradable industrial commodities of 2021.
The very first item on our list is energy commodities such as crude oil, petroleum, etc. Crude oil, a leading energy commodity, empowers the whole world. Crude oil and its products are essential for empowering industrial machinery; besides, it is necessary for transport, which is also an integral component of mining and refining other raw materials.
This commodity recently faced a significant fall due to the coronavirus pandemic last year. Demand for crude oil fell as the world was on lockdown, transportation was off. The weekly chart of crude oil shows pandemic price fall and recovery. Crude oil price is recovering from the recent fall quickly with the reopening and vaccination of coronavirus.
Ferrous and nonferrous metals
Ferrous and nonferrous metals such as engineering steel, cast iron, carbon steel, wrought iron, lead, tin, etc., are prevalent and demandable industrial commodities. Ferrous metals are highly demandable for industrial pipings, shipping containers, railroad, automobile, and domestic tools production.
The weekly chart of steel and metal products shows increasing demand. This index was near 26 at the beginning of 2021; now, it’s been trading at near 50. That’s a considerable yearly price movement for any metal, and it confirms increasing demand. So we list these in the list of top tradable industrial commodities.
Lumber is another demandable industrial commodity. It is processed wood, and people use it in planks and beams. Lumber is a useful commodity that has demand for serving structural purposes. North America and the baltic sea regions are the most prominent producers of lumber. This commodity has demand in the construction and real estate industries.
The opening price for this commodity was $666 per thousand board feet in 2021. It creates a high near $1720 in May 2021. Then fell for decreasing demand, and now it’s been trading near $634 as of writing. This commodity has the potentiality to recover to the recent high soon with increasing demand.
Nickel is the next top tradable industrial commodity on our list. Nickel has an increasing demand for batteries, coating, alloying elements, and many other uses such as mobile phones, transport, kitchen wares, jewelry power generation, and medical equipment.
The unique characteristics make this commodity demandable. It can alloy with copper, lead, silver, cobalt, gold, irons, and other elements to make Incoloy, Inconel, cast iron, stainless steel gears, etc.
The price of Nickel has been sharply rising for several years. The recent highest pick of this commodity was above $20k per tonne. As of writing, the price of Nickel is floating near $19.380 per tonne.
Aluminum is another top demandable industrial commodity of the world. This silvery-white light metal has been used for various sectors such as window frames, beer kegs, airplane parts, kitchen utensils, foils, and coins — many users for it in medication, beverages, and packaging foods.
Unique characteristics of this metal are, it doesn’t affect the food tastes and holds water. Making trays, refrigerator use, utensils, cookware involve using this commodity frequently. It is a very potential industrial commodity as the demand is increasing.
At the time of writing, the aluminum price is floating near $2919 per tonne. The yearly chart above shows a sharply upward movement of this potentially tradable industrial commodity.
Lithium is the next potentially tradable industrial commodity. The US food and drug administration (FDA) has approved prescribing medication of this metal for use in bipolar disorders. Lithium has other medication use besides bipolar disorders such as in mental illness, schizophrenia, and depression.
People have been using these commodity supplements as medicine, although they supplement much lower doses of lithium. Since the beginning of 2021, a 222.58% growth has been visible in the lithium index. Australia, China, Argentina, and Chile are the largest producers of lithium. Meanwhile, the largest lithium importers are Japan, China, the United States, and South Korea.
Cobalt is the last tradable industrial commodity in our list of the top seven. This lustrous, grey, hard metal has a high of 1493°C melting point. The principal use for this commodity is in the production of chemicals.
A unique characteristic of this commodity is superalloys for jet aircraft engines and gas turbine blades, carbides, special steels, magnets, and diamond tools. Congo is the largest producer of this industrial commodity besides Russia, China, Zambia, and Canada. Per tonne, cobalt costs $53380 as of writing. London Metal Exchange (LME) allows trading cobalt futures.
Finally, these are the top seven best tradable industrial commodities. However, demand for these commodities is increasing as people use them to make life easier. If you want to trade any of these items, we suggest choosing brokers carefully.