Two exchange traded funds (ETFs) posted stellar numbers this week. What’s behind all the movement?

Market Vectors Steel (SLX) is up 7.2% this week and up 18.4% since Jan. 22. One possible factor in the upswing is that the world’s largest steel maker, ArcelorMittal MT, said it was set to raise steel prices in the United States and Europe. ArcelorMittal MT is the fund’s top holding, at 14.9%, and it produces 10% of the world’s global steel output.

Steel demand is booming worldwide, reports Newstex, and nearly all steel makers are expanding their operations to accommodate the demand. Matthew Hill for Mining Weekly says that China’s growth, in particular, is a strong factor in the metal’s demand. In fact, Chinese steel production could double by 2012.

Other fast-growing economies throughout Latin America, Eastern Europe and Russia will place extra demand on steel, too, as they call for more cars, buildings and machines. Brazil, in particular, is a major source of demand right now.

Then there’s the overall feeling in the steel industry that it will be able to weather any kind of global economic downturn, report Aoife White and Matt Moore for the Associated Press.

Another ETF with similar returns of late is the SPDR S&P Metals & Mining (XME). In the last week, it’s up 5.7%, and since Jan. 22 it’s up 20.1%.

On top of some holdings in steel, the fund also has several companies that deal in coal mining – a major component in the production of steel.

Put the two together, and an interesting story is revealed.

Tags: Asia, Brazil, China, Coal, Eastern Europe, Emerging Markets, Energy, Europe, Infrastructure, Latin America, Material ETFs, Metals & Mining, Russia, Steel