When it comes to investing in metal, it is usually precious materials such as gold and silver that appeal to traders. These sources of wealth are extremely secure and reliable, while assets such as silver also have industrial applications. Given that precious metals can also be traded through ETF’s (negating the burden of ownership), they remain extremely popular in the contemporary economic climate. There are other metals that are worthy of consideration to, with emerging markets like the iron ore sector currently dominating the international export scene.
A snapshot of the Iron Ore Market
Traders are always keen to diversify their portfolios, especially in a volatile economy that is subject to constant and sudden change. The emergence of a relatively new market such as the iron sector therefore represents extremely positive news, especially for investors with a global outlook. This commodity began to dominate the Australian export scene between 2013 and 2014, for example, earning a staggering $75 billion in this time and outstripping the performance of other, more illustrious assets.
Given the strength of the Australian economy, it is worth noting that iron ore has made a huge contribution to this during the last two years. It is the biggest export revenue generator in Australia, accounting for 27% of all exports sales at the end of 2014. Now a more lucrative investment than gold, silver and even coal, iron ore has captured the attention of international traders and provided them with an opportunity to diversify their efforts. Unlike precious metals, however, the value of iron ore is determined almost entirely with its core purpose.
Why Iron Ore has emerged and how to make it work for you
More specifically, the recent economic turbulence has forced governments to consider initiatives that have the potential to drive economic growth. Infrastructure construction has proved to be one of the most popular measures, and this in turn has driven demand for manufacturing steel. Of the estimated 3 billion tonnes of iron ore mined annually across the world, a staggering 98% is consumed by steel mills.
While the decline of the Chinese economy may impact on the global demand for iron ore, for now this is one of the biggest growth sectors in the financial market. This is appealing to traders, who can also benefit from flexible trading methods such as over-the-counter forward contracts and principle to principle buying and selling. This is certainly a market to watch, even as the fortunes of the global economy continue to fluctuate.