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Hedge fund investment in the metals industry is at its highest since 2011, according to investment data, Reuters reports.

Data from S&P (NYSE: SPGI) Intelligence showed hedge fund investments in metals and mining stocks reached $18.52 billion in the beginning of the month.

This compares with a peak of $28.98 billion in 2010 and a low of $10.16 billion in 2015.

Data from Barclays (NYSE: BCS) shows investment in industrial metals, including from indices and exchange-traded funds, totalled $27 billion in July, up from $23 billion a year ago and $14 billion in 2015.

This is a clear sign that investors are hoping to profit from a rise in prices that have been underestimated for a very long time.

The investment by hedge funds follows a broader inflow of money into industrial metals, where prices are rising after production cutbacks helped to reduce a supply glut.

The metals industry's fortunes are turning, as an environmental crackdown in China, the world's second-largest economy and biggest consumer and producer of industrial metals, in polluting industries cuts supplies.

"We're seeing renewed interest in metals for a number of reasons ... including portfolio diversification and six years of a bear market," said Gerardo Tarricone, founder at Arion Investment Management, which is expected to launch with $10 million in start-up capital in October.

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