In a year when the Dow Jones Industrial Average (up 8.8%) and the S&P 500 (up 13%) are poised to end at or near all-time highs, the Market Vectors Steel ETF (SLX) has lost 29%. Take a look at the chart.
Investors shouldn't have been surprised, however. This past year's weak performance is not new. The fund has three-year and five-year declines of 28% and 42%, respectively, underperforming both the Dow and S&P 500 during those periods.
So will things change in 2015? Yes, but for only some steel companies.
One of the first companies investors should keep an eye on for 2015 is Steel Dynamics (STLD) . The company has been a relative outperformer this year, even though the stock has gained (only) 0.6%. Nonetheless, shares are up more than 10% over the past six months.
Investors are getting a bit more excited about the company's future. Part of the reason is that Steel Dynamics is making money, unlike rivals such as ArcelorMittal (MT) (down 37%) and Vale S.A. (VALE) (down 46%) that operate at losses. Its stock also pays a dividend yield of 2.34%, one of the best in the industry.