Let’s look closely at some of the base metals and explore base metal prices.
To begin with, what are base metals? Unlike precious metals such as gold or silver, a base metal is a common and inexpensive metal. Some of the most common base metals are copper, nickel, lead, aluminium, tin, and zinc.
Though base metals aren’t regarded to be as valuable as precious metals, they are considered necessary due to their varied practical uses. Research suggests that economists often use copper, a common base material, as an indicator for the global economic forecasts due to its widespread and extensive use in the construction industry. Low demand for copper is a clear indicator of a slump in the construction market, and consecutively, an economic downturn.
Like copper, aluminium has multiple uses and is predominantly used in the production of containers for the food and beverages industry. Zinc, another popular base metal, is not far behind copper and aluminium in terms of industrial usage. It finds extensive usage in the galvanization process.
The futures trade in base metals is expected to grow on account of the rise in base metal prices. Industrial in nature, base metals are crucial commodities in the construction and technology sectors. Therefore, they serve as integral components of an investor’s profile.