Industrial metals have been on somewhat of a bumpy road so far in 2013, though recent price movements in the copper market have made investors think twice about this corner of the commodities world. Last week, copper futures soared after several encouraging reports from China, the world’s second largest economy and one of the largest consumers of the metal, helped boost optimisim for copper demand. Though copper’s outlook has improved, there is one industrial metal that has not benefited from the rally: tin [for more industrial metals news and analysis subscribe to our free newsletter].
The industrial metal space has been struggling to gain traction as of late, as a cloudy forecast for the global economy has left these commodities in limbo. But that was not before many made strong runs in the past decade. According to Bloomberg, “six primary metals more than tripled in the 10 years to 2012.” These highs have started warding off a number of buyers as many fear a slowdown in key markets like China and other emerging economies [for more industrial metal news and analysis subscribe to our free newsletter].
As 2012 draws to an end, investors are taking time to reflect on some of the best and worst performing commodities of the year. Though the year’s headlines have been dominated by energy and precious metals, there are a number of assets that have flown relatively under the radar. Industrial metals are among the most practical commodities on the market given their wide use in our everyday lives, but they rarely receive attention over something like gold or oil. Below, we outline the performances of some of the biggest industrial metals for 2012 [for more industrial metal news and analysis subscribe to our free newsletter].
Tin has been an important part of history for thousands of years. The industrial metal was first combined with copper to produce bronze, one of the most popular metallic objects in antiquity. Thousands of years later, pure metallic tin was first produced and today it is used across a number of sectors. Nearly half of the tin produced is used in soldering, while the remainder is most popularly used in tinplates, chemicals, brass, and bronze. Production of the silvery white metal is dominated by Southeast Asia, China, and South America, although countries such as Russia and Australia also have large deposits [for more tin news and analysis subscribe to our free newsletter].
The introduction of commodity ETFs brought trading to a whole new level, as your average retail investor now has the opportunity to trade something like natural gas futures through a single ticker. As the years have gone on, a number of these products have grown to be some of the most widely-used financial instruments for their respective commodity. One advantage to ETFs, however, is that liquidity is not hindered by average volume due the the creation process. Instead, there will just be some funds that are more liquid and tradable than others [for more commodity ETF news and analysis subscribe to our free newsletter].
After gathering more than $1 trillion in total assets under management, ETFs have cemented their place in the financial world. Among the universe of nearly 1,500 products, commodity funds have garnered a lot of attention, as these products have democratized an asset class that was once difficult to reach by retail investors. Now, there are a number of exchange-traded options to help you gain exposure to your favorite hard assets, all at a low cost.
Its been more than four years since financial markets took their unprecedented nose dive, and yet some investors still cringe at the mere mention of the year that most wish they could forget. The crash of 2008 shook markets around globe, hammering down prices in nearly every corner of the investable universe. On March 9th 2009, investors were finally able to see the light at the end of the tunnel as rock-bottom markets prepared to make their turnaround. The pickup spurred investors’ appetites for riskier asset classes, luring many to the lucrative world of commodity investing. For the most part, commodities can find a place in almost everyone’s portfolio; the asset class can provide uncorrelated returns and diversification benefits, as well as serve as a potential hedge against inflationary pressures [see also 12 High-Yielding Commodities For 2012].
Welcome to CommodityHQ, a web-based resource designed for investors looking to learn more about the potential uses and risks associated with commodities as an asset class. Recognizing that commodities have the potential to add significant return enhancement and diversification benefits, while at the same time exhibiting significant risks and complexities, the team behind CommodityHQ launched this site to fill an educational void and deliver unbiased, timely, and well-researched analysis.