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Industrial products, including raw materials and some manufactured goods, are traded in a global market through regulated exchanges. Homogeneity allows for market-level pricing based on supply and demand, with metal, fossil fuels, textiles, and food products being common commodities.
Industrial products are bulk goods that can be traded within an industrial market, often through commission or regulated exchanges. Some common types of industrial products include metal ore, fossil fuels, textiles, and food products. In some cases, manufactured products, rather than raw materials, may also be considered commodities. Trading and exchanging these types of commodities is central to regional and global economies and may be the primary focus of some investors.
In most markets, trade in industrial raw materials is critical to the production and availability of goods. Creating central exchanges for certain types of goods gives all potential buyers and sellers in the market access to a pool of goods and can also help create quality standards. Most of these products are similar or identical goods regardless of source; for example, copper ore that is considered a commodity will have identical chemical and metallurgical properties, regardless of the source and method of extraction. The homogeneity of these types of commodities allows for a market-level price to be set for individual types of commodities, which can fluctuate freely based on supply and demand levels rather than qualitative differences in the commodity.
There are many different types of industrial products. The building blocks of the industry, raw materials provide the raw materials that enable the creation of manufactured goods or the operation of factories and industrial plants. Metal goods can include both base and precious metals, such as iron, aluminum, gold and silver. Fossil fuels, such as coal, petroleum and crude oil, make up a huge segment of the commodity market, as most industries require fuel for transportation and operations. Textiles, such as cotton or wool, and raw food products, such as fruit or meat, can also be important commodities for commercial industries.
Some manufactured products may also be considered industrial products, but the factors affecting the price may be more complex than the raw materials. Pulp, for example, is a staple product in the paper industry, but paper products may also be considered a commodity in some markets. Similarly, while raw wool or cotton may be a commodity, bolts of knitted or printed cloth qualify as both manufactured goods and raw components of the clothing and upholstery industries. Traders often try to break down manufactured raw materials into simple and narrow categories, so that homogeneity can be kept as close as possible.
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