Although steel companies are posting quarterly losses, that’s not dampening the bullish outlook for steel exchange traded funds (ETFs).
Both U. S. Steel Corp. (NYSE: X) and AK Steel (NYSE: AKS) are looking at their eighth consecutive quarterly loss, however, this year could paint a vastly different picture. [Coal ETFs: Can They Hang Onto Gains.]
Robert Guy Matthews for The Wall Street Journal reports that despite losses, both steelmakers see the market eventually turning back in their favor. [Steel ETFs Look for Reinforcement.]
That said, though, the steelmakers realize that recovery is highly dependent on the broader global economic recovery. says The Associated Press.
Peter Marsh for The Financial Times reports that year-over year steel price projections are an average of 32%, but the forecasts go as high as 66%.
You can play the steelmakers with either Market Vectors Steel ETF (NYSEArca: SLX) or PowerShares Global Steel (NYSEArca: PSTL). Neither fund owns any steel, so don’t expect them to track the spot price. If prices do go up this year, steel producers could have a much-improved earnings outlook.
Tisha Guerrero contributed to this article.
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.