A commodity is a product that is basic and sold by companies. It can include gold, silver, copper, corn, or oil. There are many other types of commodities. The best way to know if something is a commodity is to ask yourself if it matters who produced it. For example, commodities are products that are basic and sold by companies. Another example is gold. We’re not talking about who sells it, but who originally produced it.
When inflation goes up, the prices of commodities also go up. Because people still have to buy these goods, even though there is less supply. The prices keep rising because there is insufficient supply to meet the demand. But this can change if the producers can increase the amount of available goods.
When commodity prices go up, the stocks for companies that produce these goods also go up. It happens along the entire supply chain. Below, we’ve listed a dozen of the best stores to watch and buy if you want to invest in this trend.
Commodity Stocks to Buy
1. LyondellBasell Industries NV
This commodity stock has its headquarters in the Netherlands. There, it licenses technologies for making polyethylene and polypropylene. Fortune has named it one of the “World’s Most Admired Companies.” So, this company’s vision of being the most valuable company in its industry has come true.
2. Vale SA
Vale SA works worldwide and makes iron ore, nickel, and other things. Plus, they have over 120K employees, which makes them a huge company. They offer logistics such as shipping. Vale SA is also engaged in the energy sector. This company was founded in 1942, so it has a long history and a strong foundation for success.
3. Freeport McMoRan Inc.
Freeport McMoRan is a commodity stock that produces copper, gold, and other minerals in North and South America. They also own a mine in Indonesia. Recently, they appointed Hugh Grant to their Board of Directors. He is the CEO of Monsanto Company.
4. Alcoa Corporation
This commodity stock only sells aluminum. Aluminum seems to be something that people are always trying to use and improve in new ways. Plus, they want to have net-zero emissions soon. And this company is also proud of the fact that it started this business in 1886. Charles Hall came up with a cheap way to make aluminum, and then he started a company called Alcoa.
5. Barrick Gold Corporation
This commodity stock is a resource stock that is based in Canada. This company produces gold and copper, which is unsurprising because some of the world’s best resource stocks come from Canada. Additionally, this company operates in thirteen other countries worldwide.
6. Rio Tinto Limited
This commodity stock began in Spain in 1873. It is very ambitious and does business in 35 countries worldwide. It produces a lot of different commodities, such as aluminum, copper, boron, iron, and diamonds. The company also protects any wildlife affected by its business operations.
7. Cleveland- Cliffs Inc.
This commodity stock is an oil company that also produces iron ore. It takes care of the whole supply chain, from production to stamping to creating machines. Plus, it is the largest producer of flat-rolled steel in the entire U.S.
8. Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF
This ETF and commodity stock are heavily exposed to the energy sector. That’s why it has done so well in the past year. But you may still be able to ride this wave into next year. If oil and gas prices keep increasing, this stock will probably do well. However, if there are any alternative energy stocks in the mix, they may also do well. So investors could continue to see good returns.
9. Newmont Corporation
This commodity stock mines gold all over the world. It has mines in the United States, Dominican Republic, and Suriname.
10. Southern Copper Corp.
This commodity stock has been around for a long time and has a lot of history. That means it is likely to do well in the future. It is also significant and pays out dividends, which means it is doing well.
11. Schweitzer- Mauduit International, Inc.
This commodity stock produces a lot of materials and products that people use daily. Recently, it partnered with a company that makes glass for autonomous vehicles. It is a big deal because other companies have been working on making this type of glass in large quantities.
12. SunCoke Energy, Inc.
Suncoke is a commodity stock that is doing well. They don’t produce the commodities but handle logistics and processing. They also make coke which is an ingredient used to blast steel. SunCoke can make 5.9 million tons of coke annually, so they are set regarding processing and logistics.
Frequently Asked Questions About Commodities Stocks
What Are Commodity Stocks?
A commodity is a good that is used in trade. It is an essential item that can be replaced with another of the same type. Some examples of commodities are grains, gold, beef, oil, and natural gas. For investors, commodities can be a way to protect their investments from changes in the market by spreading their money into different types of goods.
Which Commodities do Will Rise in 2022?
According to the most recent predictions, prices for non-energy commodities such as agricultural and metals will rise by about 20% by 2022. Prices will continue to grow in the following years, but at a slower rate. Even so, commodity prices will remain much higher than in the past five years.
How Do I Buy Commodity Stock?
There are many different ways to invest in commodities. You can buy physical goods, like gold or stocks in companies that produce or mine commodities. You can also buy ETFs that track indexes of commodities.
Should I Invest in Commodities?
Commodities may help reduce the volatility of a portfolio. The returns from things are not always related to traditional assets, so they can help reduce the ups and downs of a portfolio.
What Is the Most Traded Thing in the World?
Vehicles are the most traded items in the world. In 2016, cars accounted for about $1.35 trillion in world trade. The top car exporter was Germany which contributed about 22% of the traded vehicles after exporting cars worth $150 billion.