It is not getting a lot of attention, but the materials sector has been quietly strong this year. The Materials Select Sector SPDR (NYSEArca: XLB) is up 8.3% and flirting with its 52-week high.

On year-to-date basis, the steel industry has not been a factor in the materials sector’s upside as the Market Vectors Steel ETF (NYSEArca: SLX) is down almost 4%, but the lone steel ETF has recently been picking up the pace. SLX is up 7.1% over the past three months and the ETF is could be poised to add to those gains.

“SLX stalled around $50 and has since formed a bullish consolidation above the rising 10-month moving average, with volume declining the past few weeks,” notes Deron Wagner of Morpheus Trading Group. “The daily chart shows the current basing action holding above all three major averages in April, May, and June, with a few bullish shakeouts along the way.”

An important element in the performance of SLX is the behavior of international materials, in particular, emerging markets. Brazil is the second-largest country weight in SLX at 21.3% behind the 35.1% allocated to the U.S.

Brazil’s Vale (NYSE: VALE), the world’s largest iron ore producer and frequently a top holding in large-cap Brazil ETFs, is SLX’s top holding at a weigh of almost 13%. That gives the steel ETF some correlation to additional upside for Brazilian stocks. [Brazil ETFs Rally Ahead of World Cup]