Industrial metals have been on a steady climb upwards since the beginning of the year thanks to strong demand from China and brightening prospects for a global economic recovery.
The Powershares DB Base Metal Fund (DBB) is up 49% year to date. DBB uses futures contracts to track an index of industrial metal prices including copper, zinc and aluminum.
The fund has benefited from a consecutive month run-up in copper prices. According to a Bloomberg report, the metal has more than doubled this year in London, helped by demand from China, which imported more than twice as much copper in the first half as a year earlier. The Asian nation is the world’s biggest copper consumer.
Bloomberg has also reported that Goldman Sachs raised its forecast for China’s economic growth this year to 9.4 percent, citing “strong momentum” and the likelihood that the government will delay tightening monetary policy. The previous estimate was for a gain of 8.3 percent from a year earlier.
Despite the steep climb, DBB remains well below the price level that it steadily held for most of 2008 before a sharp decline that accompanied the beginning of the global recession.