Articles
Metworld DMCC complete guide to industrial metals trading
Trading in industrial metals is lucrative as well as full of uncertainties, it is all due to the trading trends and opportunities. At times trading in metals is about price fluctuations and keeping up with the trend. Investors on the other hand are always on a look out for advantageous opportunities that these movements offer in trading of commodities, options and CFDs or contracts for differences are some of the positions that are dependent on shares of metals companies and mining. Let us learn all about the trading and how different scenario leads to changes in commodity or metal trading, this article serves as a complete guide towards understanding the same.

Metworld DMCC Supply and demand
This is probably the first and the most influential factor related to industrial metal trading that is again dependent upon construction and manufacturing sectors.

The most common metals that are popularly used for trading are steel, tin, zinc, nickel, lead, aluminium and copper. However, ever since the introduction of electric car industry there is a huge demand in rechargeable batteries that brings us to the demand of cobalt in use.

The prices of industrial metals are majorly influenced with economic activity that rises and the price increases and with less of it, the prices fall.

When the demand is high, the prices go up, at the same time supply is critical factor that is impacted with the rise in demand and often offset with increase in supply.

Market efficiency
Probably the most developed market is that of base metals that is differentiated through huge trading volumes and electronic trading at the same time these boost the market efficiency. With evolving technology, the need for base metals is increasing due to the boom in smartphone requirement and with manufacturers in electric cars that increases activity in base metals.

When the inventories are falling, there is a rise in demand for that specific metal that leads to more purchase in supplies this is the reaction that comes as a result of shortage in market. When inventories rise, then the scenario is reversed and this is indicative of oversupply.

The metals which are highly in demand for trade is as follows:

Copper
Due to the good conductivity of this metal it is popular for trading and used in building industry. Now the thing to notice is that due to the wide applicability of this metal and its versatility, it is sensitive to price changes, with rise and fall in prices and global economy it is affected.

It is said that in the year 2017 there has been rise in as much as 20% of prices of copper all due to the introduction of electric car.

Aluminium
Like copper, Aluminium is a good conductor of electricity and heat. However, in the case of the latter, its central characteristic of being both strong and lightweight has been a main driver of its widespread applications. The fact that this metal is non-corrosive is what makes it most popular for different products and for anti-corrosion treatments. Due to the rising demand of this metal the prices of the metal have risen by 21% in the year 2017. Another quality of the metal is its strength to weight ratio that makes it yet another choice for building materials.

Zinc
Zinc is again a popular choice that is favoured due to its beautiful appearance and resistance of corrosion. It is often used in door knobs and batteries. It is said that current rates of zinc are at 80% in developed countries. The leading producers of this metal are Australia, Peru and China that is also at the same time biggest producer of the metal. China is again the reason why there is a 30% price hike in its prices.

Nickel
This metal is used in production of batteries. The most common usage of this metal is for producing stainless steel. Due to its wide use the prices of this metal has gone up as much as 10%. China again emerges as one of the top producers of stainless-steel and this is where nickel is used.

Lead
Used for shielding radioactive substances. In present days it is used in production of batteries, and this leads to 80% demand of this commodity. As far as the global demand of the commodity is concerned it is in 50% use in recycling products.

Tin
Used for coating metals for making it corrosion proof, for making alloys, it is used in different metal production. Due to high demand in consumer electronics, the prices of this metal are determined by demand. China is always demanding the use of tin.

Steel
Iron ore is mined for producing steel and China comes as the largest producer as well as the largest consumer of iron ore, at the same time the country imports it on large level. The import levels of China are more due to the quality of the iron ore that is not up to the demand and it requires high quality that increases import.

Metworld DMCC Commodity Metals Price Index

The index for different prices is as follows:

Copper, aluminium, iron ore, tin, nickel, zinc and lead has risen up as much as 30% over the past year.
Commodity peak exactly came around 2011 with the record high in iron ore.
Most of the commodity demand is due to the demand made by China.

In conclusion to it all there is always an uncertain factor that determines the pricing, supply and demand of these metals.