Wall Street has been rallying since the fourth quarter of 2020 on vaccine optimism.Moreover, hopes of fatter fiscal stimulus in the United States have been driving the broader market.

President Biden plans to take his case for a $1.9-trillion stimulus plan directly to the U.S. public on his first official trip outside Washington. The move is probably to persuade Congress on sealing the stimulus deal on his terms.

Both factors instilled considerable optimism in the markets as it calls for faster return to normalcy. This, in turn, will boost global economic recovery and industrial activities. No wonder, industrial metals have been soaring.

Copper prices are near a nine-year high. The brighter prospects of the EV industry are also keeping the demand outlook decent for industrial metals like nickel and lithium. Nickel prices have been near its strongest level since 2014 while aluminum is at its highest since 2018. Tin is at its strongest since 2012 while lead is near the maximum level since 2019 (read: Guide to Electric Vehicle ETFs).

Global Industrial Production Improving

Investors should note that global manufacturing activities are in decent shape. U.S. industrial production rose 0.9% in January, marking the fourth successive monthly gain. The gain also beat Wall Street expectations of a 0.5% expansion.

China's industrial production rose 7.3% year over year in December 2020, the most since March 2019, beating market expectations of a 6.9% gain as activity continued to pick up from the COVID-19 crisis. Industrial production in Brazil grew 8.2% year over year in December of 2020, the maximum since April 2018. These figures point at a rally in industrial metal prices ahead.

China’s GDP Growth

China is a key metal consumer. Hence, China’s GDP growth is important for metal’s rally. Notably, China recorded 2.3% GDP growth for 2020, marking a V-shaped economic recovery. It was probably the only major economy to record GDP growth last year. Investors should note that China matters the most for copper as the country is the world’s biggest consumer of this industrial metal, accounting for roughly 40% of global copper demand.

Against this backdrop, we highlight a few industrial ETFs that have been rallying hard this year.

iPath Series B Bloomberg Copper Subindex Total Return ETN  – Up 8.8% YTD

The ETN tracks the Bloomberg Copper Subindex Total Return, which seeks to deliver returns through an unleveraged investment in the futures contracts on copper. The fund charges 45 bps in fees.

iPath Series B Bloomberg Aluminum Subindex Total Return ETN – Up 6.5% YTD

The underlying Bloomberg Aluminum Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on aluminum.The fund charges 45 bps in fees.

iPath Series B Bloomberg Nickel Subindex Total Return ETN – Up 13.5% YTD

The underlying Bloomberg Nickel Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on nickel. It charges 45 bps in fees.

Global X Copper Miners ETF (COPX Quick QuoteCOPX - Free Report) – Up 22.4% YTD

This ETF represents an equity option for copper investors, tracking the Solactive Global Copper Miners Total Return Index. This fund holds 30 stocks in its basket and charges 65 basis points a year in fees for the exposure. American firms make up just 9.4% of assets, leaving one-third of the basket for Canada and 11% for Britain.

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