Steel Stays Strong
Steel stocks, on a steady upward trend since the March 2009 lows, have recently outpaced the broader market.
The Market Vectors Steel ETF (SLX) is up 34% since early November compared to a 10% gain for the broader market.
After bottoming in November, scrap steel prices are up 25% and look to increase by another 15% due to seasonal supply constraints, strong exports and low mill inventory levels according to a report by J.P. Morgan.
SLX tracks an index of companies primarily involved in a variety of activities that are related to steel production, including the operation of manufacturing mills, fabrication of steel products, or the extraction and reduction of iron ore. Top holdings for SLX include Rio Tinto, Vale, Arcelor Mittal and POSCO. The net expense ratio is 0.55%.
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