Things are looking up for steel exchange traded funds (ETFs). The possibility of a rebound within global economies and the U.S. has steelmakers expanding operations and re-hiring in hopes of getting an early jump on resurgent demand.
The steel ETF might be flat year-to-date, but if signs of life in steel plants are any indication, it may not stay that way for long.
- Robert Guy Matthews for The Wall Street Journal reports that ArcelorMittal (NYSE: MT), the world’s largest steelmaker, said last week that it would restart production at a major operations center in Indiana. That plant makes steel for nearly all markets.
- U.S. steel mills are operating currently at between 70% and 75% of capacity, two-thirds busier than at the start of 2008 when operating rates were hovering between 40% and 45%. At those rates, steelmakers could return to profitability this quarter. [How to Play the Industrial Uprise With ETFs.]
- Another surprising source of growth for the steel industry is the natural gas industry. Thanks to the expanding use of the cleaner-burning fuel, new lines are needed to transport it and old ones need to be replaced, reports Kari Lydersen for In These Times. [How to Play the Natural Gas Rebound.]
- Market Vectors Steel (NYSEArca: SLX)
- First Trust ISE-Revere Natural Gas (NYSEArca: FCG)
- United States Natural Gas (NYSEArca: UNG)
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.