China’s industrial production is soaring and the country seems to be gobbling up raw materials faster than they can be produced. Exchange traded funds (ETFs) have enormous potential to move on all this buying.

China’s output rose at a faster pace in August than forecast, gaining 13.9% from a year ago. The numbers are exciting analysts, who take them to mean that domestic demand is still robust despite lending curbs and efforts to cool the real estate sector. [China Shifts to Domestic Consumption.]

The Associated Press reports that car and truck prices were up 18% in China causing a rally in metals such as steel. Automakers are looking to China’s market to offset a weaker market in the United States. [Are Steel ETFs Set for a Fall?]

These reports signal a growing demand for raw materials, particularly those that are large parts of building construction and auto production, such as:

  • First Trust ISE Global Copper (NASDAQ: CU): Copper is popular in construction, especially when used for wiring and piping.
  • ETF Securities Physical Palladium (NYSEArca: PALL) and ETFS Physical Platinum (NYSEArca: PPLT): Palladium and platinum are major components of catalytic converters, among other things.
  • Market Vectors Steel ETF (NYSEArca: SLX): Try building a car or a building without using any steel.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.