Why has the price of tin jumped in recent weeks? The economic rebound in Japan and parts of Europe has spurred increased demand for the commodity. Tin is used for soldering, especially in electronics. Inventories are down 50%.

The increased demand has come with falling production, especially in Indonesia, the world's largest producer. Tin prices have risen 30% in two months. On the London Metals Exchange (LME), tin traded as high as $20,750 per ton. This is the highest level since August 2008.

Specialty metals producer Allegheny Technologies Inc. (NYSE: ATI) is in the very enviable position of having record demand for its products despite rising prices averaging 4-39% for those same products. First off, the stock is up almost 30% for the year, opening the year at $88.45, and closing on July 13 at $114.97, up $.67. Analysts consider $125 to be a fair target, so there is still plenty of movement left in the stock. Its P/E of 16.85 is significantly below industry average, while its 6.47 EPS is very much above industry average. Return on stockholders equity is above 50%, and the company has half a billion dollars on hand in case it likes the look of other companies to acquire.

Allegheny Technologies recently posted record quarterly profits for 1Q 2007. Sales increased 32% to $1.37 billion. Net income increased a whopping 86% to $198 million, about $1.92 per share, almost double the net income of 1Q 2006. Demand for its higher priced titanium-based products has reached record levels in the aerospace and defense industries. Demand of what CEO L. Patrick Hassey terms "exotic alloys" is at a record level. ATI is building additional capacity to service this demand, which shows no signs of abating, despite significant increases in the costs of raw metal materials. ATI has instituted cost containment measures to help counteract the hike in raw material prices.

ATI consists of three main product divisions. High Performance Metals is the largest division and deals primarily with titanium related metals used in aircraft construction. Despite capacity expansion, this division is facing record backlog orders to satisfy demand. Sales in this division increased 35% to $477 million for 1Q 2007. Sales in the Flat-Rolled Products division increased 20.4% for an operating profit of $160 million, despite a noticeable decline in shipments of commodity stainless sheet metals. The Engineered Products division deals with tungsten-related products. ATI is currently expanding capacity for this division and hopes to increase production significantly by the end of 2Q 2007. ATI posted revenues in excess of $5 billion for the most recent four quarters, and expects that figure to increase as 2Q 2007 figures surpass record levels set in 1Q 2007. There does not seem to be a downside to this stock at this time.

Investing in mining stocks is not for the weak of stomach even under the best of circumstances. The complicated threeway deal involving Phelps Dodge (copper), Inco Ltd. (nickel) and Falconbridge Ltd. (nickel) fell through because there were simply too many best guess scenarios touted by senior management to allow shareholders to feel comfortable voting to increase debt levels in the combined company to almost $20 billion. Phelps Dodge mines primarily for copper, which is enjoying an upswing in price worldwide due to rising demand from China. Inco Ltd. and Falconbridge Ltd., both Canadian-based and both nickel mining companies, proposed a merger with Phelps Dodge to stave off hostile bids. Canadian-based Tech Cominco Ltd. was after Inco Ltd. Swiss-based Xstrata PLC gained control of Falconbridge Ltd. in August, thus squashing that portion of the deal.

Now both Inco Ltd. and Phelps Dodge are acquisition targets. Companhia Valo de Rio Dolce SA of Brazil has offered $17 billion cash for Inco Ltd. Phelps Dodge had originally offerd $17.4 billion in cash and stock for both Inco Ltd. and Falconbridge Ltd. Tech Cominco Ltd. is still in the bidding for Inco Ltd. Phelps Dodge senior management is now talking about a possible merger of Phelps Dodge and Inco Ltd. though that is the unlikeliest scenario given the no votes from Inco Ltd. shareholders already this spring. The only folks in favor of this threeway were senior management at the companies. Most analysts thought the threeway was a stinker from the get-go, including Mark Sirower of Pricewaterhouse Cooper. He called the deal "an invention of investment bankers" with little understanding of the economics of the industry.

OK, so who doesn't want to buy Inco? The latest bidder at the table is Brazil's CVRD. The company plans to offer a whopping $15.1 billion for the popular miner.

It's hard to believe that – in the Internet Age – the big money is not being made with companies like eBay or Yahoo, but with crusty commodities companies. Then again, the world is undergoing an tidal wave of industrialization, especially in China and India.

That means there will be lots of demand for nickel, which is good news for Inco's shareholders. Interestingly enough, since Inco sold itself a month ago, there are now six bidders chomping at the bit to snag the company.

Actually, CVRD looks like a good bet as the winner in the contest. The company is massive, with a market cap of $55 billion.

So, should investors grab more stock of Inco? Probably not. It's getting into nose-bleed levels right now – and as usual, the pros have taken much of the profits already.

Tom Taulli is the author of a variety of books, such as the Complete M&A Handbook (Random House) and has his own firm, InvestorOffering.com.