NEW YORK (

TheStreet

) -- Steel appears to have a bright future.

As emerging markets continue to grow, so does their need for new infrastructure, and that boosts demand for steel.

The metal appears to be fundamental in the broader economic recovery as well. Developed countries like the U.S. continue to build infrastructure, and as the U.S. economy begins to see positive growth again, the demand for steel by automakers and manufacturers likely will increase.

Additionally, steel is inversely related to the dollar, which, despite its recent bounce, is expected to decline over the long term.

From a supply perspective, it appears that China is starting to deplete its steel inventories. That will mean China will look for more steel and drive prices higher.

Another thing to keep in mind is that as the demand for steel rises, so will the demand for other metals. Most goods that require steel also require other metals such as copper.

Some exchange-trade funds that are likely to benefit from steel's rise include:

The

Market Vectors Steel ETF

(SLX) - Get Report

, which closed at $57.82 on Tuesday, more than twice its March low of $22.14.

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The

SPDR S&P Metals & Mining

(XME) - Get Report

closed at $47.42 Tuesday, up 128% from its March low of $20.81.

The

iShares Dow Jones US Basic Materials

(IYM) - Get Report

, which closed at $57.53 on Tuesday, up 103% from its March low of $28.36.

When investing in these commodity-based ETFs, it is important to keep in mind the inherent risks involved. A good way to mitigate these risks is through the use of an exit strategy. According to the latest data at

www.SmartStops.net

, an upward trend in the previously mentioned equities could come to an end at the following price points: SLX at $54.58; XME at $45.43; IYM at $56.00. These price points change with market volatility and updated data can be found at www.SmartStops.net.

-- Written By Kevin Grewal in Laguna Niguel, Calif.

Kevin Grewal serves as the editorial director and research analyst at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Additionally, he serves as the editorial director at SmartStops.net where he focuses on mitigating risks and implementing exit strategies to preserve equity. Prior to this, Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton.