It appears as if the import inventory glut may be over with the Market Vectors Steel Exchange Traded Fund (SLX) showing big gains last week. Joanne Von Alroth of Investor’s Business Daily reported AK Steel Holding (AKS) had a projected earnings and sales rise of 5% in 2007, based on current global demand. There was an 11% overall industry surge, while the fund closed higher on news the industry in general is showing strength.
The biggest weightings for SLX are Companhia Vale do Rio Doce (RIO), a Brazilian-based mining company with 14.28% of the fund’s investment. Rio Tinto (RTP) makes up 13.16% and Mittal Steel (MT), a Netherland’s steel company, holds 7.22%. The emerging markets such as China and India will keep the demand for steel strong, but this fund isn’t for conservative growth-oriented investing, it’s more volatile than broad-based funds.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.