After slumping for much of the first half of this year, the VanEck Vectors Steel ETF (NYSEArca: SLX) is surging as highlighted by a gain of 16.7% over the past month. Global steel demand and production data could be behind the steel ETF’s recent rally.

SLX tries to reflect the performance of the NYSE Arca Steel Index, which follows global companies involved in the steel industry. Part of the problem are expectations that the Trump Administration will push off its ambitious infrastructure effort until next year.

“Despite contracting in June by 1.7% US steel output still grew 1.3% in H1 2017 after two years of contraction as higher prices encourage the restart of idled plants and the new Big River Steel plant in Arkansas continues to ramp up output,” reports Frik Els for Mining.com.

Investors will have to keep a close watch over China, the largest producer of steel, which made up half of the 1.6 billion metric tons produced last year. Beijing has cut back production after the international community accused Chinese producers of dumping excess products on the global market.

“Data released on Monday showed Chinese steel output last month rose 5.7% from the year before to a record 73.2m tonnes, surpassing April’s all-time high of 72.8m tonnes. For the first six months Chinese furnaces pumped out 4.2% more steel, to just under half the global total according to the World Steel Association,” reports Mining.com.

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