Industrial metals-related exchange traded products are strengthening this year as tightening inventory levels and rising optimism for a return to global growth following a U.S.-China trade deal are supporting the fundamental outlook.

Year-to-date, United States Copper Index Fund (NYSEARCA: CPER) gained 12.0%, iPath Series B Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) rose 11.9%, iPath Serues B Bloomberg Nickel Subindex Total Return ETN (NYSEArca: JJN) increased 21.5% and iPath Series B Bloomberg Tin Subindex Total Return ETN (NYSEArca: JJT) advanced 12.7%.

Meanwhile, the broader Invesco DB Base Metals Fund (NYSEArca: DBB) was up 7.8% and iPath Bloomberg Industrial Metals Subindex Tota Return ETN (NYSEArca: JJM) was 11.0% higher.

Industrial metals fundamentals look promising. On the supply side, according to data compiled by Capital Economics, inventories of several metals stored on global exchanges have declined over 25% from the start of last year through February 18, the Wall Street Journal reports. Meanwhile, with Washington and Beijing coming closer to a trade deal, investor sentiment on the demand side has further helped support pricing.

“We suspect that the primary reason for the falls seen in global exchange stocks is that mine supply growth has been sluggish,” Capital Economics analysts said in a recent note.

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