) -- The "stuff" of industry and manufacturing is at the core of base metals and materials generally. From companies producing raw base metals to end users comprise the constituents for many indexes to which ETF/ETNs are linked.

When these areas are vibrant and moving higher you would imagine demand is high and economic growth increasing accordingly.

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(SPDR Materials ETF)

(XLB) - Get Report

is heavily weighted by mining companies with

Freeport-McMoran Copper & Gold

(FCX) - Get Report

having an 11% weighting.


(SPDR Metals & Mining ETF)

(XME) - Get Report

has roughly 40% weightings in companies like

Allegheny Technologies

(ATI) - Get Report


Massey Energy




(AA) - Get Report


Cliffs Natural Resources

(CLF) - Get Report



(NUE) - Get Report

and so forth.


(Market Vectors Steel ETF)

(SLX) - Get Report

is heavily weighted by notable companies

Rio Tinto

(RIO) - Get Report

(12%) and

Vale SA


(VALE) - Get Report

. Each of these companies is involved in the extraction of base metals whether in Australia, Africa or Brazil.


(iPath Copper ETN)

(JJC) - Get Report

is structured as a note featuring exposure to copper futures markets. Copper is often referred to as "Dr. Copper" given that demand for the metal reflects economic conditions and forecasts better than most pundits and PhDs can.

High prices translate to economic growth logically. The new player on the world scene is of course China and to a lesser extent India. Providers include Australia, Brazil and Chile among others.


(iShares Silver Trust)

(SLV) - Get Report

offers exposure to a metal with both industrial use (semiconductors) and precious metals. Uniquely silver trading on futures exchanges is now in "backwardation" -- meaning the front month is priced higher than back month contracts. This indicates high current demand and a lack of supply. Naturally, this is bullish.

At least for now, materials and metals remain strong with only minor (save Silver) drawdowns along the way. All this is quite bullish and indicates strong industrial demand.

The key question is, will these higher costs be easily passed along to end users including consumers? If so, then we'll have the good news of stronger growth but the bad news being higher inflation or stagflation.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of

ETF Digest

, Dave's Daily blog and the best-selling book author of

Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management

, published by Wiley Finance in 2008. A detailed bio is here:

Dave Fry.