Metals prices have been bobbing up and down over the past few months, buoyed by waves of optimism about the global economy, then dragged back by the undertow of recession.

But in recent weeks there has been a clearly rising tide. Take silver, which was hammered at the end of last year when industrial and consumer demand collapsed. The silver price was up 42 per cent in the first half and analysts have been upgrading their price estimates and outlook forecasts for precious metals companies such as Fresnillo and Hochschild.

Gold and silver prices usually track each other closely, but in recent months silver has risen while gold has gone sideways. More than half of silver production is used in industrial applications such as electronics, while only a fifth of gold goes to industrial use. The divergence in prices suggests that industrial demand has been rising.

In a similar vein, Rio Tinto said yesterday that its iron ore production from the Pilbara region of Western Australia had risen by 35 per cent between the first and second quarters. It is now operating at full tilt.

Meanwhile, it appears that the Chinese have failed in their attempts to secure a 40 per cent to 50 per cent reduction in the iron ore price. Reports from the country suggest that the world’s largest consumer of metals has settled on a 33 per cent cut with Rio Tinto, which has been leading negotiations on behalf of the large mining groups.

Not all metals have benefited — aluminium remains weak — but the strength in other prices suggests that the strong recovery in industrial production in Asia has further to go.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive