Base metals, precious metals exchange traded funds (ETFs)…the stars of 2010 are nearing dud territory in the first month of 2011. Analysts, however, say that won’t be the case for much longer.

Metals ETFs such as ETFS Physical Palladium (NYSEArca: PALL) and PowerShares DB Base Metals (NYSEArca: DBB) have faltered in the early part of this year. DBB is just flat for the month so far, while PALL is up a more decent 8% – but it’s a far cry from the nearly 30% it gained last year.

Analysts aren’t letting recent moves get them down: they’re sticking to the forecast that metal prices will pop this year.

  • Steel prices could jump as much as 66%, no doubt a move that would benefit Market Vectors Steel (NYSEArca: SLX) if it comes to pass. That kind of inflation has only been seen once in the steel industry in the last 70 years, says The Wall Street Journal.
  • The analysts also cite China’s aim of double-digit foreign trade growth this year. As the world’s largest consumer of metals, it wouldn’t be shocking to see China’s purchases push the prices gold, copper and other metals even higher.
  • AlbanianMinerals in New York says it’s getting a record number of new orders for raw minerals, copper, nickel, chrome ore and iron ore this year.

Right now, however, metals ETFs are clearly feeling some pain. Sign up for alerts to be notified by email when the pain ends and is replaced with a trading opportunity.

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.