Why do basic materials net margins move so sharply with the commodity cycle?

Producers of metals, chemicals, steel, and paper products ship into global markets where prices are set by the balance of supply and demand rather than by the individual firm. Because the cost of running a mine, smelter, or mill is largely fixed, any change in realized prices flows almost directly through to the bottom line. That produces net margin expansion during commodity upswings and sharp compression or losses during downturns, and is why no single year can be treated as representative of the long-run profitability of the asset base.

What does a durable net margin across cycles reveal about a materials producer?

If a producer holds positive net margin even through weak commodity periods, it usually means the firm sits at the lower end of the global cost curve, thanks to high ore grades, favorable feedstock access, or efficient integrated operations. Those producers survive and often gain share when higher-cost peers struggle. Net margin over a full cycle, rather than any single year, is the more meaningful lens in basic materials, and it frequently separates structurally advantaged producers from those riding the cycle.

Top Basic Materials Stocks by Net Margin

Top basic materials companies ranked by net margin, latest annual filings.

What Net Margin Means for Basic Materials Companies

Net margin in basic materials is highly cyclical for the same reason it is in energy: producers market largely undifferentiated commodities whose prices are set globally, while their cost base is dominated by fixed assets and long-lived operations. Miners, chemicals, steelmakers, and paper-and-packaging firms each have distinct economics, but across the sector the bottom-line margin tends to expand dramatically in commodity upswings and compress or turn negative in downturns.

Why It Matters in Basic Materials

A net margin that holds through a commodity trough usually reflects low-cost asset positioning and integrated operations rather than any particular pricing ability, since pricing is not in management's control. It is worth noting that inventory write-downs, environmental remediation provisions, and mine or plant impairments can produce large single-period swings in reported net margin that are driven more by cycle turn timing than by operational performance during the period.

What to Read Alongside

Pair net margin with Gross Margin for the top-of-stack spread between realized price and direct cost, Operating Margin for the middle layer, and Free Cash Flow because these businesses are heavily capital-intensive.

Data as of FY 2025 82 companies Rhea AI

#	Symbol	Company	Sector
1	WPM	Wheaton Precious Metals Corp.	Basic Materials	63.58%	$56.90B
2	FNV	Franco-Nevada Corporation	Basic Materials	61.01%	$44.57B
3	AGI	Alamos Gold Inc.	Basic Materials	48.97%	$13.02B
4	BVN	Compania de Minas Buenaventura S.A.	Basic Materials	47.94%	$8.27B
5	RGLD	Royal Gold, Inc.	Basic Materials	45.25%	$18.48B
6	GFI	Gold Fields Ltd ADR	Basic Materials	41.66%	$33.40B
7	KGC	Kinross Gold Corporation	Basic Materials	35.03%	$30.39B
8	SCCO	Southern Copper Corporation	Basic Materials	32.30%	$161.05B
9	AU	AngloGold Ashanti plc	Basic Materials	32.08%	$44.30B
10	NEM	Newmont Corporation	Basic Materials	31.25%	$111.09B
11	CDE	Coeur Mining, Inc.	Basic Materials	28.30%	$16.09B
12	EGO	Eldorado Gold Corporation	Basic Materials	27.73%	$9.37B
13	PAAS	Pan American Silver Corp.	Basic Materials	27.08%	$20.25B
14	IAG	IAMGold Corporation	Basic Materials	25.67%	$9.27B
15	HBM	Hudbay Minerals Inc.	Basic Materials	25.52%	$11.69B
16	CF	CF Industries Holdings, Inc.	Basic Materials	25.38%	$17.70B
17	SSRM	SSR Mining Inc.	Basic Materials	24.28%	$5.87B
18	HL	Hecla Mining Company	Basic Materials	22.61%	$10.65B
19	BHP	BHP Group Limited	Basic Materials	21.74%	$223.30B
20	LIN	Linde plc	Basic Materials	20.30%	$225.93B
21	MLM	Martin Marietta Materials, Inc.	Basic Materials	18.50%	$32.33B
22	EXP	Eagle Materials Inc.	Basic Materials	18.36%	$6.48B
23	RIO	Rio Tinto Group	Basic Materials	17.78%	$162.12B
24	AG	First Majestic Silver Corp.	Basic Materials	16.78%	$8.52B
25	NEU	NewMarket Corporation	Basic Materials	15.37%	$8.21B
26	BCPC	Balchem Corporation	Basic Materials	14.93%	$5.75B
27	SSD	Simpson Manufacturing Co., Inc.	Basic Materials	14.79%	$7.96B
28	SQM	Sociedad Química y Minera de Chile S.A.	Basic Materials	14.00%	$20.69B
29	VMC	Vulcan Materials Company	Basic Materials	13.56%	$36.49B
30	ECL	Ecolab Inc.	Basic Materials	12.91%	$79.46B
31	EQX	Equinox Gold Corp.	Basic Materials	12.19%	$12.54B
32	TTAM	Titan America SA	Basic Materials	11.14%	$2.90B
33	SHW	The Sherwin-Williams Company	Basic Materials	10.90%	$88.22B
34	ORLA	Orla Mining Ltd.	Basic Materials	10.10%	$3.54B
35	AMRZ	Amrize Ltd	Basic Materials	10.03%	$28.35B
36	CRH	CRH Public Limited Company	Basic Materials	10.02%	$64.97B
37	PPG	PPG Industries, Inc.	Basic Materials	9.93%	$26.04B
38	AA	Alcoa Corporation	Basic Materials	9.02%	$12.53B
39	CBT	Cabot Corporation	Basic Materials	8.91%	$4.52B
40	NTR	Nutrien Ltd.	Basic Materials	8.54%	$31.86B
41	FCX	Freeport-McMoran Inc.	Basic Materials	8.50%	$95.45B
42	RPM	RPM International, Inc.	Basic Materials	8.41%	$14.76B
43	SXT	Sensient Technologies Corporation	Basic Materials	8.34%	$5.47B
44	HWKN	Hawkins, Inc.	Basic Materials	7.52%	$2.71B
45	ESI	Element Solutions Inc.	Basic Materials	7.48%	$9.37B
46	NEXA	Nexa Resources S.A.	Basic Materials	7.43%	$1.89B
47	AXTA	Axalta Coating Systems Ltd.	Basic Materials	7.41%	$8.03B
48	IOSP	Innospec Inc.	Basic Materials	6.56%	$2.25B
49	STLD	Steel Dynamics, Inc.	Basic Materials	6.52%	$37.48B
50	CTVA	Corteva, Inc.	Basic Materials	6.29%	$51.28B
51	SOLS	Solstice Advanced Materials, Inc.	Basic Materials	6.10%	$9.88B
52	CX	Cemex S.A.B. de C.V.	Basic Materials	6.01%	$16.31B
53	EMN	Eastman Chemical Company	Basic Materials	5.42%	$8.40B
54	NUE	Nucor Corporation	Basic Materials	5.37%	$61.95B
55	MT	ArcelorMittal S.A.	Basic Materials	5.29%	$55.21B
56	RS	Reliance, Inc.	Basic Materials	5.17%	$21.35B
57	VALE	Vale S.A.	Basic Materials	5.16%	$62.64B
58	KNF	Knife River Corporation	Basic Materials	4.99%	$3.83B
59	UFPI	UFP Industries, Inc.	Basic Materials	4.66%	$5.07B
60	MOS	The Mosaic Company	Basic Materials	4.49%	$7.46B
61	FUL	H.B. Fuller Company	Basic Materials	4.37%	$3.18B
62	HCC	Warrior Met Coal, Inc.	Basic Materials	4.35%	$4.73B
63	SMG	The Scotts Miracle-Gro Company	Basic Materials	4.25%	$3.61B
64	MTRN	Materion Corporation	Basic Materials	4.19%	$5.80B
65	WLKP	Westlake Chemical Partners LP	Basic Materials	4.17%	$0.75B
66	MEOH	Methanex Corporation	Basic Materials	4.03%	$4.21B
67	SLVM	Sylvamo Corporation	Basic Materials	3.94%	$1.50B
68	ICL	ICL Group Ltd.	Basic Materials	3.91%	$6.80B
69	KALU	Kaiser Aluminum Corporation	Basic Materials	3.35%	$2.80B
70	ASIX	AdvanSix Inc.	Basic Materials	3.24%	$0.54B
71	CSTM	Constellium SE	Basic Materials	3.23%	$3.88B
72	KOP	Koppers Holdings Inc.	Basic Materials	2.98%	$1.01B
73	AVNT	Avient Corporation	Basic Materials	2.51%	$3.91B
74	JHX	James Hardie Industries plc	Basic Materials	2.15%	$16.25B
75	BCC	Boise Cascade Company	Basic Materials	2.07%	$2.94B
76	SCL	Stepan Co.	Basic Materials	2.01%	$1.45B
77	TX	Ternium S.A. American	Basic Materials	1.94%	$10.19B
78	CENX	Century Aluminum Company	Basic Materials	1.58%	$4.55B
79	DD	DuPont de Nemours, Inc.	Basic Materials	1.28%	$19.45B
80	ZEUS	Olympic Steel Inc	Basic Materials	1.18%	$0.54B
81	AAUC	Allied Gold Corporation	Basic Materials	0.25%	$2.62B
82	WS	Worthington Steel, Inc.	Basic Materials	0.25%	$1.89B

How this ranking is built

Companies are ranked by net margin as reported in their most recent annual filing with the SEC. Figures shown are in US dollars (or percent, as noted), rounded to two decimals.

Source: annual 10-K / 20-F filings from companies trading on US exchanges (NYSE, Nasdaq, AMEX).
Fiscal year: whichever annual period the company has most recently filed. Fiscal years don't always align with the calendar year, so the "as of FY" stamp above reflects the most common year across the table.
Filtered out: warrants, preferred shares, and duplicate listings that share a parent company's financials.
Update cadence: refreshed as companies file new annual reports (typically within 60–90 days of fiscal year end).

Not financial advice. This is a research tool, not a recommendation.