ETF Trends
ETF Trends

The VanEck Vectors Steel ETF (NYSEArca: SLX) has been a surprise (and impressive) performer among industry exchange traded funds this year, surging more than 45% after a couple of years of dismal showings.

Steel is finally making a comeback after years of underperforming. The slowdown in China was the main culprit in dragging on the steel sector, reports Abigail Stevenson for CNBC. The weaker economy translated to a diminished demand for steel.

Related: Strengthening Dollar Plaguing Copper ETN

Some steel industry analysts are increasingly bullish on the sector, including some of the specific names found in SLX, such as United States Steel Corp. (NYSE: SLX) and AK Steel (NYSE: AKS).

“We remain very bullish on the US steel industry and our new supply / demand model for the US flat rolled market indicates continued deficits for value add sheet into 3Q-16, supporting prices well above fair value levels,” according to an excerpt of a Credit Suisse note posted by Ben Levisohn of Barron’s.

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However, since the start of March, U.S. steel has been gaining ground when Congress passed a new customs and trade enforcement bill that allowed the Obama administration to take action against Chinese dumping. The Department of Commerce imposed a 265.79% tariff on Chinese steel, according to the Wall Street Journal.

Credit Suisse boosted its rating on AK Steel to outperform from market perform.

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