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Invest in steel and iron ore stocks from Australia

What to know before investing in this staple engineering and construction material.

Iron ore is used to make steel, which in turn is used in the construction and other infrastructure industries across the world.

Steel production plays a big role in Australia's economy and employs around 100,000 people. There are major steel produces on the ASX in Australia – such as BlueScope Steel – along with dozens of stocks that sit in steel sub-categories, such as iron ore or coal, which are used to produce steel.

Read on to find out which steel stocks are on the ASX and how you can invest in steel from Australia.

Iron ore and steel stocks

Iron ore and steel ETFs

Exchange-traded funds (ETF) hold securities that are connected to an industry. To date, there are no ASX-listed ETFs that only purely track steel or iron ore, however, some mining industry ETFs contain steel and iron ore companies, such as the BetaShares Australian Resources Sector ETF (QRE) and the VanEck Australian Resources ETF (MVR).

Buy iron ore and steel stocks online

You'll need a brokerage account to invest in steel in Australia. Take a look at the options below:

1 - 7 of 7
Name Product Price per trade Inactivity fee Asset class International
eToro
Finder AwardExclusive
eToro
$0
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account (T&Cs apply).
CFD service. Capital at risk.
Join the world's biggest social trading network when you trade stocks, commodities and currencies from the one account.
CMC Invest
Finder Award
CMC Invest
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Moomoo Share Trading
US$0.99
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get an additional 30 days on top of the regular brokerage-free period for new accounts. T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
Spaceship US Investing
US$0
$0
US shares, ETFs
Yes
Dive into US markets with $0 brokerage, starting with just a $10 investment.
Unlock US stocks and ETFs with minimal entry barriers, offering straightforward, low-cost options for new and seasoned investors.
Tiger Brokers
US$2
$0
ASX shares, Global shares, US shares, ETFs
Yes
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
Webull
US$0.25
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Sign up & deposit $200 to get $100 of rewards value, or deposit $1,000 to get $200 worth. Up to $5,450 value available. T&Cs apply.
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
Saxo Invested
US$1
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Access 22,000+ stocks on 50+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
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Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

What are steel and iron ore stocks?

Steel stocks are companies that mine and manufacture steel products. Because iron ore is used to produce steel, iron ore and steel companies are often one and the same.

Steel is mainly used in construction, such as building infrastructure and tools, and household items such as sewing needles and canned foods.

Why invest in steel or iron ore stocks?

Steel is a trusted and versatile construction material and is beloved for its durability, flexibility and low cost. Steel stocks perform well when the economy is strong.

In the past decade, China has seen explosive growth and maintains a high steel demand. Other large infrastructure projects around the world also up the demand for steel products, leading to higher profits and returns. And as the economy flourishes, the need for new buildings and construction continues to fuel the steel industry.

Risks of investing in steel

While steel currently plays a major part in our daily lives, there are specific risks involved in investing in steel and its uncertain future:

  • Fewer large steel mills. The costly investment and environmental concerns — which prompted government policies like the 1970 Clean Air Act — have suppressed the construction of new steel plants.
  • Steel alternatives. New building materials are gaining traction in new construction projects. For example, engineered timber is sustainable, a quicker, cleaner building material, and just as strong as steel.
  • Recycled steel. You can recycle steel continuously without compromising its strength. The greater availability of recycled steel can reduce the prices of steel stocks, potentially eliminating the need for steel production in the next 30 years.
  • Tariffs. Trade wars and tariffs can negatively affect steel stock prices. For example, the 2018 US tariffs against China imports, which were first imposed on steel and aluminum, are estimated to have cost US companies at least $US1.7 trillion in stock prices.

How to buy steel and iron ore stocks

If steel stocks are right for you, here's a breakdown of how to get started in Australia.

1. Research stocks

Before you invest in steel stocks in Australia, evaluate the companies that produce steel or use it to make products. Examine their financial statements. Take a close look at their assets, liabilities, shareholder equity and other metrics found on their balance sheet. You can usually find this on the investor relations section of a company's website.

You also may want to check whether the company has announced any plans to deal with present challenges such as production issues or dealing with potential trade tariffs. In addition, you can also look to see how a company sizes up against its competitors. By closely examining these companies, you can get a good sense of what may be a good investment.

2. Open a brokerage account

Before you begin making trades, you need to open a brokerage account. You can choose from plenty of online brokerage accounts in Australia, but they can differ vastly in terms of fees and tools. So make sure you compare your options.

If you're new to investing, consider an investment app for beginners. If you're an experienced investor check out brokerages like TD Ameritrade or Vanguard which offer sophisticated research and analytical tools.

3. Purchase Stocks

Once you've opened and funded your brokerage account, you can begin buying stocks. Simply look up a stock by company name or ticker symbol. Then, decide the number of shares you want to buy and place your order.

Market projections for steel stocks

Global steel production volume is expected to rise to 2175 million tonnes by 2024, according to Research and Markets. Throughout this course, the industry is expected to expand at a compound annual growth rate (CAGR) of 4.50%

This growth is expected to be driven by factors such as the expansion of urban populations and increased spending on construction and infrastructure projects. China is expected to remain the largest producer of steel, partly driven by a boost in the production of automobiles and electrical appliances. However, price volatility could be a major challenge to steel stock investing in the coming years.

Bottom line

The steel industry is a staple in the world’s industrial economy. Steel stocks can be profitable when the economy is booming, but keep your eye on how tariffs and developments in the steel industry affect stock prices.

Compare trading platforms in Australia to start investing in steel.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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