The global macroeconomic conditions continue t

The global macroeconomic conditions continue to improve with China of course leading the charge. A strong economy is typically associated with strong activity in the industrial sectors which use a lot of raw materials such as copper , steel, and aluminum which in turn boost prices for those metals and increase shareholder returns of companies involved with those metals.

The two largest economies in the world belong to the U.S. and China.  Q4 GDP for the U.S. was a -0.1% but some called it the " best looking contraction " in GDP as the downturn was led by the private inventory investment, in federal government spending, in exports, and in state and local government spending. Government spending and inventory investment are both known to be very volatile components of the GDP. Despite the contraction, analysts were decidedly bullish. One analyst said that the report suggests upside risk to its forecast of 1.0% for Q1 GDP. Another said that the "overall, the details of the GDP report are clearly better than the unpleasant headline figure suggests." A third one said that "once you take a deep breath, read past the headline, and delve into the numbers, you'll see that this is actually a pretty good report."

China's Q4 GDP figures were much more straightforward.  GDP rose 7.9% y/y versus expectations of a 7.8% rise. Industrial production, the key driver of metal consumption, rose 10.3% y/y. The figures were strong and a BofA economist said that more upside to growth is expected from here with GDP growth peaking at 8.3% in 1H13 and slowing down to 8.0% in 2H13. The economist noted that investors should remain bullish in 1H13. DBS Vickers economist Chris Leung thinks infrastructure investment is still a bullish theme and said that there are signs that fixed asset investment is already picking up in the non-transport infrastructure space. Leung concluded that the economic "slowdown has run its course."