Metals

Iron Ore

Iron ore is the core component of steel, which is used in many forms of modern construction. Steel can be recycled – on average it takes 17 years for a piece of steel to be reused – so demand is proportionately much higher in countries which are industrializing. Today, China produces half of the world’s steel, some two million tonnes per day. It imports 80 million tonnes of iron ore a month and accounts for two thirds of seaborne demand.

On the supply side, Australia is the largest exporter of iron ore with 2015 exports of 760 million tonnes. Brazil exported 365 million tonnes, together these two countries accounted for over 90% of total seaborne exports in 2015.

Alumina Ore

Alumina is properly called aluminum oxide, which is a chemical compound comprised of aluminum and oxygen molecules (Al2O3). When refined from bauxite, alumina generally looks like a white powder similar to table salt or granular sugar. Aluminum oxide is typically referred to as alumina, but may also be called aloxide, aloxite or alundum, depending on the industry and the metal’s use.

Alumina is produced from bauxite through a process called the Bayer process. The Bayer process is carried out in four steps. First, after the bauxite is crushed, washed and dried, it is dissolved with caustic soda at high temperatures. Next, the mixture is filtered to remove the impurities, called “red mud,” which is properly discarded. The remaining alumina solution is transferred to tall tanks called precipitators. In the precipitator tank, the hot solution starts to cool and aluminum hydroxide seeds, very small particles, are added. The aluminum hydroxide seeds stimulate the precipitation of solid aluminum hydroxide crystals. The aluminum hydroxide settles at the bottom of the tank and is removed. Finally, the aluminum hydroxide is washed of any remaining caustic soda and heated to remove excess water. After this process, alumina (aluminum oxide) emerges as a fine white powder. It looks much like sugar used in baking, but is hard enough to scratch a pane of glass.

In addition to its use in the production of primary aluminum, aluminum oxide has other key industrial uses. Alumina is often used as a filler for plastics. The compound is also widely used as an abrasive and is a less-expensive substitute for industrial diamond. Aluminum oxide flakes produce reflective effects within the paint used on automobiles. The largest scale use of alumina occurs in refineries, where the aluminum oxide compound is used to convert dangerous hydrogen sulfide waste gases into elemental sulfur.

Alumina that occurs in a natural, free form state is referred to as the mineral corundum. In special circumstances, corundum forms into sapphire and ruby gemstones. These gemstones can be produced synthetically and are occasionally referred to as alumina. This term is usually limited to the synthetic gemstones used in the metallurgy, ceramics and chemical processing industries. Naturally formed rubies and sapphires are two of the four precious gemstones, emeralds and diamonds being the other two.

Copper Ore

Copper is a red-colored metal that is believed to be the first metal ever used by humans. Today, copper is widely used in industrial manufacturing for the production of a large number of every day items, such as electric wiring, microwaves and home heating systems.

Unlike gold, silver and platinum, copper is available in greater quantities in nature, it costs less and therefore it’s not viewed as a currency. The mass industrialisation of the developing world has pushed the production of copper higher since 2011.

Due to its use in a diverse range of industries, the price of copper is often used as a barometer for the performance of the global economy. That’s why you might hear commodity traders referring to it as Dr. Copper. With such a strong position in the world economy, let’s take a look at the unique characteristic of the market, the factors that affect the price and how traders can take advantage of them.