What is a Tradable Commodity?

A tradable commodity is a basic good or raw material that can be bought and sold in the global market, typically in standardized contracts on regulated commodity exchanges. These goods are fungible, meaning each unit is interchangeable with another unit of the same grade or type, regardless of the producer or origin. This standardization allows for efficient trading, transparent pricing, and broad market participation.

Tradable commodities are typically divided into two main categories: hard commodities, which are natural resources such as oil, gold, and metals, and soft commodities, which include agricultural products like wheat, coffee, sugar, and livestock. These goods are critical to industrial production, food supply chains, and energy systems, making their availability and pricing vital to businesses and consumers worldwide.

Tradable VS Non-Tradable Commodities

Tradable commodities are goods or resources that can be sold and consumed outside the region where they are produced. Meanwhile, non-tradable commodities (including certain goods and services) can only be consumed where they are produced.

Read also: The Role of Supply and Demand in Commodity Pricing

Top 5 Commodities by Traded Volume in 2025

The information below is sourced from commodity futures data monitored by CNBC (and LME for aluminium) as of 31st March 2025.

1. WTI Crude Oil

West Texas Intermediate (WTI) is a high-grade, light, and low-sulfur crude oil mainly extracted in the United States. It serves as one of the world’s most prominent and frequently traded benchmark crude oils. Due to its high quality and ease of refining, especially into gasoline and other high-demand products, WTI is widely used as a benchmark grade of crude oil, particularly in the U.S. and North America. Its price can be volatile due to shifts in global supply and demand.

Its price is often compared to other global benchmarks, such as Brent Crude. It plays a significant role in reflecting market sentiment, geopolitical risks, and supply-demand dynamics in the oil sector.

2. Aluminium

The trading volume of aluminium is influenced by a variety of interrelated factors spanning supply dynamics, industrial demand, and broader macroeconomic conditions. On the supply side, global production levels, particularly from major producers such as China, Russia, and Australia, play a significant role.

Since aluminium production is highly energy-intensive, fluctuations in power costs and availability can directly impact output and market activity. Disruptions caused by geopolitical tensions, sanctions, or natural disasters can also tighten supply and increase trading volume due to heightened price volatility.

3. Gold

Gold is one of the most prominent and actively traded commodities in the global financial markets. Unlike many other raw materials, gold has historically been regarded as an economic asset used as a store of value, though its price is subject to significant volatility. Gold is fungible, durable, and widely recognized across international borders, making it a suitable medium for trading.

4. Copper

Copper is a highly valuable base metal and one of the most actively traded industrial commodities in the global market. It is widely used in construction, electrical wiring, electronics, transportation, and renewable energy systems, making it a critical material for both traditional infrastructure and emerging green technologies.

Due to its conductivity, durability, and recyclability, copper prices are often closely tied to global industrial trends but remain susceptible to broad market fluctuations.

5. Natural Gas

Natural gas is a crucial energy commodity widely traded in global markets due to its essential role in electricity generation, heating, industrial production, and chemical manufacturing. It is a fossil fuel composed primarily of methane and is valued as being cleaner than coal or oil.

The trading volume and price of natural gas are affected by several factors, including seasonal demand (especially in winter for heating and summer for cooling), weather forecasts, inventory levels, production rates (including shale gas output), geopolitical events, and the availability of LNG infrastructure.

Read also: Energy Commodities and the Global Transition