A Solid Steel ETF

Don Dion is the president and chief investment officer of Dion Money Management and the publisher of the Fidelity Independent Adviser family of newsletters. He provides commentary on the financial markets, with an emphasis on exchange-traded funds and mutual funds.

As demand from emerging markets fuels the need for raw materials, companies that extract iron ore and produce steel are on the rebound. While a cloud of uncertainty hangs over the global economy, the demand for steel is surging.

Preliminary figures from China's Ministry of Transportation estimate that the country's imports of iron ore for the month of May are up 25% year over year, totaling more than 55.5 million metric tons. The Market Vectors Steel ETF(SLX Quote) has returned 96.88% for the three-month period ending June 8 and nearly 57% year-to-date. China's $300 billion commitment to improve infrastructure coupled with rising demand for ore from both Chinese and European steel-makers should continue to help SLX rise further in 2009. ...