Steel Volume, Price and Profits Will Likely Decline in 2007 NEW YORK, Jan. 23 /PRNewswire/ -- While 2006 was a year of strong earnings growth for the steel industry, Standard & Poor's Equity Research Services does not see similar growth prospects for the industry in 2007. These and other findings are available in a semi-annual report on the metals industry, Metals: Industrials Industry Survey, published by Standard & Poor's, a leading provider of independent investment research. Standard & Poor's Equity Research sees a number of factors contributing to a decline in demand for steel in 2007, including a slower growing U.S. economy; a 2% to 3% decrease in demand from the U.S. auto industry, versus an estimated 9% gain in 2006; and a decline in shipments to distributors and OEMs, compared to a projected 4% gain in 2006. "Many of the steel industry's clients are sitting on excess inventory that will take a good portion of the first half of the year to work through. Additionally, the industry is highly leveraged to the U.S. automotive manufacturers, several of which may cut production. When you factor all of this together, it adds up to our negative outlook on the industry," said Leo Larkin, Senior Metals and Mining Analyst, Standard & Poor's Equity Research Services. "The lone bright spot for the industry is non-residential construction, but that one market won't be able to offset weakness in other markets in 2007." Standard & Poor's Equity Research believes the following companies are best positioned to weather the declines in the steel industry: Carpenter Technology (NYSE: CRS; $106), which has a "Buy" recommendation (4-STARS out of 5), is a maker of specialty metals for aerospace and other capital goods markets that should achieve strong earnings growth in 2007. Additionally, S&P has "Buy" (4-STARS) recommendations on Commercial Metals (NYSE: CMC; $26), Gerdau Ameristeel (NYSE: GNA; $9) and Reliance Steel & Aluminum (NYSE: RS; $39) due to their exposure to the non-residential construction markets and what S&P sees as attractive valuations. Standard & Poor's Industry Surveys provide a broad and fundamental overview of each industry's structure, its recent performance, and an analysis of trends that are expected to influence it in the future. Each Survey is organized into the following sections: Current Environment, Industry Profile/Industry Trends, How the Industry Operates, Key Industry Ratios and Statistics, How to Analyze a Company, Industry References, Comparative Company Analysis, and a Glossary of terms used in that industry. Both text and data are provided, as are references to additional sources of industry information. Two surveys on each industry are published each year. To view a video clip of Standard & Poor's equity analyst Leo Larkin discussing the-industry, please click here: mms://a1802.v19724b.c19724.g.vm.akamaistream.net/7/1802/19724/v0001/streamlogics.download.akamai.com/25711/S_and_P/sptv-survey-64.wmv Readers can purchase Standard & Poor's Industry Surveys three ways: Online for immediate download at http://sandp.ecnext.com/, by telephone at 212-438-4052, or via e-mail order sent to . Members of the media can request a copy from the communications contact listed at the end of this release. The analyst quoted above is a Standard & Poor's equity analyst. He has no affiliation with any company he covers, nor any ownership interest in any companies he covers. About Standard & Poor's Equity Research Services As the world's largest producer of independent equity research, Standard & Poor's licenses its research to over 1,000 institutions for their investors and advisors, including 19 of the top 20 securities firms, 13 of the top 20 banks, and 11 of the top 20 life insurance companies. Standard & Poor's team of 120 experienced U.S., European and Asian equity analysts use a fundamental, bottom-up approach to assess a global universe of approximately 2,000 equities across more than 120 industries worldwide. Follow Standard & Poor's equity analysts' U.S. market commentary each day at http://www.equityresearch.standardandpoors.com/. The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are performed separately from any other analytic activity of Standard & Poor's. Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's. Standard & Poor's does not trade for its own account. The analytical and ethical conduct of Standard & Poor's equity analysts is governed by the firm's Research Objectivity Policy, a copy of which may also be found at http://www.standardandpoors.com/ or by clicking here: http://www2.standardandpoors.com/spf/pdf/equity/ResearchObjectivityPolicy2005.pdf . About Standard & Poor's Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 7,500 employees, including wholly owned affiliates, located in 21 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com/ DATASOURCE: Standard & Poor's CONTACT: Ed Sweeney Communications Tel.: +1-212-438-6634 Web site: http://www.standardandpoors.com/ http://sandp.ecnext.com/

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