Four Dominating Commodities That Are Subject To Industrial Processing

The production of commodities was influenced by endogenous and exogenous factors. Each was often different for the three main markets (cereals, metals, and energy). The demand for each commodity category and the factors that affect them varies and often change at different rates and intensities.



Cement is a raw material used in the construction industry and is usually transported in the form of gray or white powder and clinker. It is a result of the firing at a high temperature of 1450 degrees Celsius of a grounded and homogenized mixture of limestone and clay. Bulk cement is the main type of export, accounting for almost 60% of the total, while clinker represents about 25% of the total cement trade. The remaining 15% are cement products.

This market is directly connected to the shipping market since most of the companies are located by the sea with specialized terminals. 40% of the sea cement trade is managed by 5 multinational companies. The growing consumer demand for construction and infrastructure are the main factors driving the market. Prolonged growth in the housing sector and the increasing global exceeded demand for the cement industry resulted in improved efficiency, transport, and logistics. Moreover, the costs of shipping by bunkers, access to finance and its costs affect the demand and trends of cement.

Forest products – Timber 

Wood - Forest Products

Forest products occupy the second place with about 18% of the total small loads in bulk. This category includes any wood product and can be divided into either raw materials or processed products. Raw materials include logs or tree trunks, sawn timber, wood pellets, pulp, and wooden bars. Logs require specialized loggers that are suitable for the hooks and other handling materials needed to load and unload them.

Factors that affect the timber trade, as well as most commodities, are the demand that arises. The demand is mainly from the housing and construction industry, paper demand as well as the new uses of wood. Environmental regulations, stocks held by countries and timber companies, and transport costs are factors that influence supply. Weather conditions also affect the harvesting and processing of timber, as the humid atmosphere makes it difficult to cut down trees. As in other commodities, duties and other protectionist measures have a negative effect on the overall timber trade.

Steel products

Steel welding - commodities

Steel products are perhaps the most important by-products with a minor bulk market share of around 21%. Products containing steel are made of materials such as rods, beams as well as slabs, rollers, and pipes. Steel products are mainly exported from major industrialized countries for import to other industrialized nations and developing countries. It is obtained by processing raw materials such as iron ore, coal, and scrap or steel products. Steel is used in large quantities in construction and infrastructure, the automotive industry, transport, and consumer goods.

Many studies cite the movement of steel prices as a barometer for the course of the economy, as it is that good that forms the most important stages of many investments in essential sectors of the economy. The course of China’s economy has been and is an important factor in the steel trade. It uses almost 45% of the world’s steel. The development of infrastructure around the world or on the contrary their consolidation is an essential factor in the steel demand. Moreover, the cost of raw materials and in particular iron ore has a direct effect. Demand for transportation such as ships or cars tends to affect trade in steel while as in any good that is traded worldwide the protectionist policies of the states shape its course.

Fertilizers as commodities

fertilization process - commodities

Fertilizers are also secondary goods and their use is very important for the development cereals industry and agriculture in general. They receive a significant percentage of the tonnage used. It is worth mentioning that India has been transformed from a seed importer into a producing country within 25-30 years due to the use of fertilizers. The three main types of fertilizers are nitrogen, phosphate rock, and processed potash. Iodine and sulfur are also two fertilizer products that are marketed in large quantities.

The demand for fertilizers is a derivative demand of these agricultural products. This has started since they are used mainly in the production of cereals but also as livestock feed. Fertilizers are subject to industrial processing, which requires energy. For this reason, their supply is affected by the price of gas and oil. Safeguards and tariffs also affect this market as well as subsidies for strengthening national markets. As with any commodity traded on international markets, fertilizers are affected by currency imbalances as the supply chain means that fertilizer retailers must view demand and inventory six to nine months before the purchase and use of products by producers. Nitrogen prices, which are linked to the energy market, remain more volatile than the prices of other fertilizers. 

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