What is a Steel Industry ETF
The steel industry ETF is an exchange-traded fund that invests primarily in the manufacture of steel and related steel industry products.
BREAKING DOWN Steel Industry ETF
The steel industry ETF group contains manufacturers of all steel related products, including mining and production. Steel was once big business in the United States, but these days there are fewer steel mills. Some of these exchange-traded funds have a global reach. China and Russia also produce large amounts of steel.
Some of the products these funds refer to include steel mines, production of some steel-based goods and recycling industry related materials. The investment possibilities for these exchange-traded funds go beyond the physical products that are produced, and can include the work of the companies that hold the leases on the land and distributors as well.
In a bull market, steel stocks rank higher as they are tied to development and production in the economy. That is not to say that they are infallible; many steel towns saw a large economic downturn after the Industrial Revolution. When Bethlehem Steel went bankrupt, many in the town of Bethlehem and the surrounding area found themselves unable to find work in an industry that was experiencing a sharp decline.
The History of Bethlehem Steel
Approximately two hours outside of Philadelphia, Pennsylvania lies a small town named Bethlehem. It was once the home of Bethlehem Steel, one of the largest steel producers in the United States. The town originally produced iron for the railroads. Most of the railroads on the east coast are forged with Bethlehem iron. Then, in later years, production switched gears and began producing steel. By 1868, the steel business was booming.
Bethlehem prospered during this time. Between the iron and steel production, they were building railroads and warships for most of the United States. After the Industrial Revolution, the U.S. economy switched focus, and industrial manufacturing began to experience a downturn. Without being able to change with the times, Bethlehem Steel began to lose profitability. They eventually filed for bankruptcy in 2001. The company was dissolved, and any remaining assets were sold to International Steel Group.
Today, the Steel Stacks enjoy a second life. They are home to Bethlehem’s annual summer music festival, Musikfest. When they are not hosting musical acts, the former steel mill shows movies in the theatre and comedy shows in the auditorium. During Christmas, the town transitions into Christmas City and holds one of the countries largest holiday markets, known as Christkindlmarkt.
The town’s use of the defunct steel mill has served as inspiration for other towns that have suffered the same fate as it now attracts a large tourist population.