Basic Materials

Search Dictionary

Definition of 'Basic Materials'

The basic materials sector is a group of companies that produce the raw materials used in a variety of industries. These companies include mining companies, oil and gas producers, and forest products companies. The basic materials sector is important to the global economy because it provides the raw materials that are used to produce goods and services.

The basic materials sector is cyclical, meaning that its performance tends to follow the business cycle. When the economy is growing, demand for basic materials increases, and prices rise. When the economy is in recession, demand for basic materials falls, and prices decline.

The basic materials sector is also subject to a number of other risks, including commodity price volatility, political instability, and environmental regulations. Commodity price volatility can make it difficult for basic materials companies to plan their operations and make profits. Political instability can disrupt the supply of basic materials, leading to shortages and higher prices. Environmental regulations can increase the cost of production for basic materials companies.

Despite the risks, the basic materials sector can be a profitable investment. The sector is cyclical, so it can provide investors with good returns during periods of economic growth. The sector is also essential to the global economy, so it is likely to remain important for the foreseeable future.

Here are some of the companies that are included in the basic materials sector:

* Alcoa
* BHP Billiton
* Freeport-McMoRan
* Rio Tinto
* Vale

These companies are all involved in the production of raw materials, such as aluminum, copper, iron ore, and coal. They are all important players in the global economy, and their stocks can be a good investment for those who are looking for exposure to the basic materials sector.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.