In the commodity world, lithium is a rising star as its use and prevalence has skyrocketed in recent years. Thanks to a wealth of new technologies, lithium is slowly becoming a staple metal for a number of products and industries. As one of the lightest metals out there, lithium is used widely in pharma, ceramics, aluminu, and a number of clean technology processes. Given its wide spread, it should be no surprise that the commodity has also grown as an investment in recent years [for more lithium news and analysis subscribe to our free newsletter].
Uranium may be coming back into play two years after the Fukushima disaster, as Japan looks to restart some of its idle reactors and global supplies look to tighten a bit. Larger companies operating in the space have already seen their share prices begin to recover over the past couple months as these fundamentals improve, with Cameco Corp (CCJ) up 9.5%, Denison Mines Corp (DNN) up 7.2% and Uranerz Energy Corp (URZ) up about 1%. But many investors are wondering if this recovery will persist in the coming months [for more uranium news and analysis subscribe to our free newsletter].
As the world’s voracious appetite for all things commodity continues to grow, it is perhaps no surprise to see frequent backlash from the public, particularly eco-conscious groups. In recent months, Sydney-based mining firm Lynas (LYC.AU) has fallen under the media spotlight as an unlikely opponent managed to gather enough support to disrupt the company’s plans to expand its operations. With the support of Twitter, Facebook and the good ol’ world wide web, retired math teacher Tan Bun Teet and his “Save Malaysia, Stop Lynas” campaigners have drawn nationwide support through an internet-based campaign to challenge the environmental impact of the rare earths mining company’s refinery plans [for more rare earths news and analysis subscribe to our free newsletter].
Rare earth metals (also known as “rare earth elements” or “REEs”) are 17 chemical elements in the periodic table. While many of these elements are actually found abundantly in the earth’s crust, their geochemical properties and dispersion make them difficult to extract in the pure forms necessary for use in many critical industries [for more rare earth metal news subscribe to our free newsletter].
For commodity investors looking to diversify their holdings, rare earth/strategic metals have presented several potentially lucrative opportunities over the years. As such, many have shifted their assets to this niche segment, causing a tremendous influx of investments from around the globe. But, of course, following the logic of simple economics, the overflow of investments combined with a significant supply gut has put considerable pressure on the players in this once-hot corner of the commodity market [for more rare earth/strategic metal news and analysis subscribe to our free newsletter].
While key commodities such as corn, gold, and copper often dominate the spotlight, a group of metals known as ‘rare earths’ have a reputation of truly shining through with amazing returns. In fact, some of the top metals in the group, such as Neodymium, Dysprosium, Yttrium, and Erbium, put up gains in the past that would make metals such as silver or gold’s historic performances in 2011 look down-right bearish. For example, of the four rare earths outlined above, the worst performer in 2011 had a gain of ‘just’ 50% while several saw their prices surge by over 200% in year-to-date terms. Returns in 2012 have not matched these amazing standards set by the previous year, but that doesn’t mean this market will not surge again [for more rare earth metals news and analysis subscribe to our free newsletter].
When it comes to commodity investing, there are a few big players that tend to gather the majority of investor attention. Futures products like crude, gold, and natural gas gobble up headlines while others like sugar and aluminum tend to fall by the wayside. Commodities like zinc and tin have far more practical industrial use than something like gold, yet their respective volumes come nowhere near the coveted precious metal. For those investors looking to make a commodity play that brings you closer to the ground in an economic sense, there are a number of strong options available [for more commodity news and analysis subscribe to our free newsletter]
For commodity traders, futures contracts and futures-based products are usually the go-to financial instruments for gaining exposure to your favorite hard assets. While futures investing may be appealing, there are many serious drawbacks and costly nuances to this strategy that can impact bottom-line returns. And without fully understanding how futures work and without being able to frequently monitor a trade, futures positions can quickly turn sour. For those who wish to avoid futures, we outline an all ETF portfolio that is designed to provide well-rounded exposure across all of the major commodities completely devoid of these contracts [for more commodity news and analysis subscribe to our free newsletter].
China is the world’s largest country, edging out second-placed India by nearly 100 million people. And with mass of citizens totaling to 1.34 billion, it should be no surprise to see the country exhibit fears of resource scarcity. But it also comes as no surprise to see the Chinese government taking actions to ensure that they have their fair share of global resources and commodities available to them. One example being the announcement of Canadian oil firm Nexen agreeing to an acquisition by China’s CNOOC for approximately $15.1 billion dollars [for more commodity news and analysis subscribe to our free newsletter].
Today’s investing environment has led many investors to search for strong dividend yields. With near zero interest rates and an uncertain debt market, turning to dividends has become one of the most popular strategies to grace an investors portfolio since the recession began. For commodity investors the search was quite difficult; many commodity investors stick primarily to futures contracts or futures-based assets like the United States Natural Gas Fund (UNG) among others. But for those who look closely enough, there are some enticing yields in the space [see also 12 High-Yielding Commodities For 2012].