SOURCE: The Bedford Report

The Bedford Report

January 26, 2011 11:25 ET

Surging Demand Expected to Send Steel Sector Higher in 2011

The Bedford Report Provides Analyst Research on Steel Dynamics & AK Steel

NEW YORK, NY--(Marketwire - January 26, 2011) - Steel demand and production have improved nicely in the past year due to increased government support and more balanced demand. The rebound in demand has been largely attributed to stronger auto and non-residential construction sectors as well as surging steel demand from China and India. According to the Steel Index, Iron-ore prices more than doubled in the past two years largely due to emerging market demand. The Bedford Report examines the outlook for companies in the Steel Industry and provides research reports on Steel Dynamics Inc. (NASDAQ: STLD) and AK Steel Holding Corporation (NYSE: AKS). Access to the full company reports can be found at:

Steel industry experts expect steel prices to increase by $25-30 per tonne in the next three to four months, aided by growth in the auto sector. It is estimated that car production could increase by as much as 50 percent in the coming years as demand for automobiles picks up. This is welcome news for the steel industry as the automotive sector historically used around 20% of the United States production supply.

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Steel Dynamics saw its share price rise to kick off the week after the company forecast that the economic recovery would fuel greater industrial demand. The company did not post a particularly strong fourth quarter -- net income of $7.8 million, or 4 cents per share, was down from a profit of nearly $26.7 million, or 12 cents per share, in the same quarter a year ago -- but the company expects "substantially improved" first-quarter results across all the company's segments.

AKS Steel also believes it is on the "road to recovery." Yesterday the company said it swung to a fourth-quarter loss of $98.3 million, or 89 cents a share, from a profit of $37.9 million, or 36 cents a share, in the year-ago period. Going forward the company believes most of its markets are strengthening due to strengthened demand.

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