AK Steel (NYSE: AKS) accounts for nearly 1% of SLX. The ETF’s largest holding is Rio Tinto (NYSE: RIO) at 13.3%. SLX will need the financially strong names in its portfolio to rebound before mounting a legitimate combeback.

“The relatively stronger balance sheets and ability to continue generating net income and FCF, in spite of the sharp drop in finished-steel prices and high level of imports, continues to make mini-mills the best house on a bad block,” adds Cowen.

Market Vectors Steel ETF