Investing in Steel

Steel is an essential resource for emerging markets since it is required for manufacturing and construction. The level of demand will reflect things such as the needs of …

Steel is an essential resource for emerging markets since it is required for manufacturing and construction. The level of demand will reflect things such as the needs of growing economies such as China, India, Vietnam, Russia and Brazil, as well as other developing nations.

One way to invest in this nonprecious metal is through an exchange-traded fund (ETF).

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"The base metals sector, including steel, is very cyclical, with large purchases coming during good economic times. With most economies well into their economic booms, and markets richly valued, if economic growth starts to slow, steel is likely to change from red-hot to cold rather quickly. Pricing pressures can also come from geopolitical tensions, government intervention, and supply shortages," according to The Motley Fool.

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