Aluminum A metal often used to form light, corrosion-resistant alloys. Aluminum is the most abundant metallic ore in the earth’s crust.

Ammonia A colorless gas that is often used to manufacture fertilizers and a wide variety of nitrogen-based chemicals.

Anode The fourth stage of metal smelting. Anodes are typically 99 percent pure metal. Metals of this quality are used for many purposes in construction.

Backwardation A situation in which the future price of a commodity is lower than the current price of commodity; the opposite of contango.

Baltic Dry Index An index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals and grains by sea.

Bar Steel Usually formed from carbon steel, bar steel is commonly used in reinforced concrete and reinforced masonry structures. It is often given ridges for better frictional adhesion to the concrete.

Barrier to Entry Obstacles such as high costs or regulatory hurdles that prevent new competitors from easily entering a business or industry.

Base Metal Non-ferrous metal, excluding precious metals.

Basic Oxygen Furnace (BOF) A furnace used in the steelmaking process to convert the molten iron from a blast furnace into refined steel.

Blister The result of the third stage in metal smelting. It typically has a 95 to 98 percent metal concentration. It is named “Blister” due to the blisters that form on the metal as the result of having hot air blown through it as part of the refining process.

Capacity Utilization Rate A metric, generally expressed as a percentage, which is used to measure the extent to which a company is maximizing output. Generally, high capacity utilization rates tend to be indicative of tight market fundamentals for the product being produced.

Capital Intensive A business process or an industry that requires a significant amount of capital relative to labor to produce a given good. It is often characteristic of businesses with high fixed investment costs. Capital intensive industries tend to have higher barriers to entry due to the high level of initial investment that is required.

Cathode The fifth and last stage of metal refining. Cathodes are typically 99.99 percent pure metal. Only metals that require the highest degree of purity are turned into cathodes. One example is copper wiring. Pure copper is a more efficient conductor of electricity.

Cement Clinker Cement clinkers are formed during the processing of cement in a kiln. Limestone, clay, and other ingredients are heated in specific proportions in a rotating kiln until they begin to form cement clinkers. Cement clinkers are usually ground with gypsum to produce the fine powder later mixed with liquid to produce cement.

Cold-Rolled Coil Steel Flat rolled products that are rolled in a Cold Strip Mill at room temperature. The advantages of cold -rolled strip over hot strip lie in better surface quality and thinner sections.

Concentrate In the metals and mining industry, concentrate generally refers to metallic ore with about a 15 to 35 percent metal concentration. It is the result of the first stage in processing after mining and must be smelted to become refined metal.

Concrete A construction material consisting of cement, as well as other materials such as construction aggregate.

Construction Aggregate Material used in construction, generally in conjunction with cement. Aggregate may include sand, gravel, crushed stone, slag, and recycled concrete.

Contango A situation in which the price of a commodity for future deliver is higher than the current price of the commodity; the opposite of backwardation.

Cost Curve Within the Metals & Mining industry, it is a graphical representation of the cost of production for all producers of a given metal. It is most often graphed by producer, region, and individual mine.

Downstream A relative term referring to the latter stages of the production process. For example, steelmaking might be said to be “downstream” to iron ore mining, as steelmakers use iron to create a value-added production.

Durable Good A category of goods designed to last over three years. Automobiles and airplanes are examples of durable goods.

Electric Arc Furnace (EAF) A furnace used in the steelmaking process that re-melts steel scrap into usable steel products. Electric Arc Furnaces are also known as “mini-mills.”

Ethylene Ethylene is produced from hydrocarbons in a process called steam cracking. Ethylene is primarily produced as a building block for other industrial chemicals. It is one of the simplest hydrocarbons and heavily used as a building block for more complex chemicals.

Fixed Cost A cost that remains constant, regardless of the level of quantity of goods produced. Capital intensive businesses generally have a higher proportion of fixed costs.

Flat Steel Steel that is rolled from carbon steel slabs into flat sections. Force Majeure French for “greater force,” this is often a clause included in contracts designed to free parties from liability or obligation when a circumstance beyond their control prevents them from fulfilling their contractual obligations.

Fungible A good is said to be fungible if any one unit can be equally exchanged for another unit. For example, copper might be said to be fungible because one ton of copper is substantially equal to another ton of copper.

Futures Curve The set of prices at a given date for futures contracts on a given asset with different settlement dates. It is differentiated from a forward curve by the underlying asset, which must be traded on futures exchange.

Futures Exchange A marketplace for the exchange of futures. Futures are a standardized contract to buy or sell a certain underlying good (e.g., a metal) at a given future date at a specified future price.

Galvanized Steel Flat carbon steel products coated with zinc in order to provide corrosion protection.

Genetically Modified An organism (typically an agricultural production) that has had its characteristics modified by the alteration or insertion of a gene.

Hardwood The wood of a dicotyledonous tree, which produces seeds with a covering such as fruits and nuts. Typically of greater density, durability, and higher value than softwood. Often used in furniture and flooring.

Hot-Rolled Coil Steel A steel product that is rolled through a Hot Strip Mill at high temperatures.

Industrialization A process of economic development in which a society is transformed into an economy based on industry rather than agriculture. It is generally part of a broader modernization process that often involves the acceleration of large-scale energy and metallurgy production.

Iron Ore Fines Fine grain-sized pieces of iron ore and smaller. It has the lowest value of three types of iron ore due to its small size, which makes it the least efficient for steelmaking due to the dust escaping in steam and smoke.

Iron Ore Lumps Iron ore produced as lumps, often as large as a golf ball. Lumps come from the same mines and are made of the same material as fines, but are larger and therefore more efficient in the steelmaking process.

Iron Ore Pellets Semi-processed iron clumped together in pellets with clay. Iron ore pellets tend to have a higher iron content than iron ore fines or iron ore lumps.

Lignin The chemical compound that works as a natural glue to hold cellulose fibers together in wood.

Marginal Cost of Production The change in total cost that arises when the quantity produced changes by one unit; the marginal cost is the cost of the next unit produced.

Matte The result of the second stage in metal smelting. Matte typically has a 40 to 60 percent metal concentration.

Metallurgical Coal A fine coal that is ground into powder and heated in coke ovens to produce coke. Coke is used as an agent in the blast-furnace production of iron.

Metric Ton (Tonne) A unit of weight equivalent to 1,000 kilograms (or 2,204 pounds).

Mineral Rights The right to extract a mineral from the earth, usually received in exchange for a royalty on sales of the mineral.

Mini-mill A type of steel mill that uses Electric Arc Furnaces to re-melt scrap into usable steel. It is often located regionally and is able to start and stop production more efficiently than a traditional steel mill using iron ore-based blast furnaces.

Non-Residential Construction The construction of any permanent structure not used for residential purposes. This includes both public infrastructure and commercial development.

Open Pit Mine An aptly named method of mining in which ore and waste are extracted from the surface of the ground, often resulting in a large pit.

Phosphate A phosphorus-based chemical that is mined from the ground and often used for agricultural fertilizer.

Pig Iron A ferrous product produced by smelting iron ore with coke. Pig iron is often used in basic oxygen furnaces to produce steel.

Pig Iron Nickel Also referred to as nickel chromium pig iron, pig iron nickel is an iron and nickel alloy used as a precursor for stainless steel and produced from low grade nickel laterite ore, which is primarily found in Indonesia and the Philippines.

Price Cap The maximum rate or price, usually determined by a government organization, which can be charged for a particular good or service.

Price Elasticity A measure of the responsiveness of the quantity of a good demanded due to a change in its price. A product with a high price elasticity of demand would show a large change in quantity demanded relative to a change in price.

Potash Potassium or a potassium compound, often used as fertilizer in the agricultural industry.

Propylene Similar to Ethylene. Propylene is produced from hydrocarbons in a process called steam cracking. Propylene is used as a raw material for the production of industrial chemicals. It is one of the simplest hydrocarbons and heavily used as a building block for more complex chemicals.

Residential Construction The construction of a single-family home or townhouse. A form of private fixed-investment.

Sawmill A mill or machine for sawing logs into lumber.

Scrap Metal Discarded metal waste material that can be recycled in non - ferrous metal smelters or steel mills.

Short Ton (Ton) 2,000 pounds. A ton, as commonly used in the US and Canada.

Slag The ferrous residue resulting from the smelting of iron ore with coking coal.

Smelter A processing plant used to extract and refine metal from unrefined ore. It plays a similar role in metal refining as an oil refinery does in oil refining. Different metals often require different smelting processes.

Softwood The wood of a coniferous tree, which produces seeds without a covering. Softwood tends to be softer and less dense than hardwood. It is primarily used in residential construction.

Stainless Steel Steel that has been alloyed with at least 10 percent chromium, and often containing other elements (such as nickel) that are resistant to corrosion or rusting.

Steam Coal Coal used in power plant and industrial steam boilers to produce electricity.

Steel A durable metal alloyed from iron and carbon and widely used as a structural material.

Steel Service Center A distribution center that purchases primary steel products from mills. It also often fabricates the steel to the end user’s specification.

Tariff Taxes imposed on the import or export of goods or services. Treatment and Refinement Charge (TC/RC) Fees smelters charge to form a metal into an anode (treatment charge) and to refine it into a cathode (refinement charge).

Upstream A relative term referring to earlier stages in the production process, close to the start or source of production. For example, iron ore mining might be said to be “upstream” to steelmaking, as iron ore is necessary for steel production.

Urea A nitrogen-based substance that is widely used in the agricultural industry as a fertilizer.

Value-to-weight ratio A metric generally used to evaluate the commerciality of transporting a good. If a good has a low value-to-weight ratio, the revenues from the sale of the good may not be sufficient to offset the cost of transporting it.

Variable Costs Expenses that change in portion to the quantity of goods or services produced.

Vertical Integration When a company operates in the upstream and downstream stages of a production process, they are said to be vertically integrated.

Windfall Tax A type of tax that governments often levy on resource industries when economic conditions allow them to attain above -average profits.