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Sometimes, commodity ETFs all seem to be rising in tandem. Other times, they’re all operating on their own distinct trend lines. This could very well be one of those times.

Examine a list of the top-performing funds in the last month, and you’ll find many base and industrial metals ETFs on the list.

Among the funds showing the most strength in recent weeks include:

  • SPDR S&P Metals & Mining (NYSEArca: XME), up 23.1% in the last month

  • Market Vectors Steel (NYSEArca: SLX), up 20.2%

  • iPath DJ AIG Copper (NYSEArca: JJC), up 18.8%

  • Market Vectors Coal (NYSEArca: KOL), up 18.4%

Even iShares MSCI Australia (NYSEArca: EWA), a proxy for basic materials if there ever was one, has gone gangbusters in the last month, shooting up 15%.

What gives?

  • Some risk appetite is returning. Greece still has no clear resolution to its crisis, but assurances that a deal is close has lured more investors to come out and play.
  • Emerging markets, as usual. China, especially, has led the drive to consume copious amounts of copper and steel. But don’t forget other emerging markets. India, Brazil, South Africa, Egypt and others are in various stages of amassing raw materials to support their growth efforts.
  • Supply and demand. Mother nature has crimped Chile’s efforts at mining and producing copper. While the country’s miners are mostly back and running, aftershocks could threaten progress. China is rabidly consuming coal and iron ore, but they’re two of the commodities in shortest supply.

For full disclosure, Tom Lydon’s clients own shares of EWA and XME.

Source: Why Metals ETFs Are Leading the Pack