HIGH ENERGY PRICES UNDERCUT STEEL INDUSTRY CAPITAL INVESTMENTS IN THE FOURTH QUARTER OF 2005; PRODUCTION AND SHIPPING HOLD STEADY

COLUMBUS, Ohio (May 5, 2006) –  Capital expenditures for the Ohio steel industry plummeted in the fourth quarter of 2005 because of high energy and raw material prices, according to the Ohio Steel Council’s 2005 year-end data report.

Ohio steel companies had charted record capital investments through the first three quarters of 2005 with quarterly increases over the previous year of 40-75 percent, but as natural gas prices escalated in the fall, the industry cut back, according to the Ohio Steel Council.

The Ohio Steel Council records quarterly capital expenditures for new plant equipment, upgrades and other technology. These expenditures ensure that the steel industry remains competitive.

Capital investment for the fourth quarter of 2005 was $70 million, a 60 percent decrease over fourth quarter 2004. Capital investment for entire year in 2005 was $315.4 million, a decrease of 10 percent over 2004.

In steel production and shipments for 2005, the industry fell just short of 2004 levels. The industry set a high water market for steel production in 2004, following several years of restructuring in the wake of the foreign steel imports crisis.

Production was 14.5 million tons in 2005, a 2.47 decrease over 2004. Shipments were 15.4 million tons, a 0.27 percent increase.

Employment fell 1.9 percent in 2005 over 2004, with an average of 15,157 employed directly in steel production.

“Worldwide demand and pricing for steel have remained steady in fourth quarter 2005, but sharp increases in energy prices, particularly for natural gas, undermined the Ohio steel industry’s ability to invest in new technology,” said William A. Brake Jr., chairman of the Ohio Steel Council and executive vice president, operations, Mittal Steel USA. “High energy costs, along with high raw material prices, continue to adversely affect the industry,” he said.

The Ohio Steel Data Report, compiled by Youngstown State University’s Center for Urban Studies, covers statistics from Ohio facilities of the Council’s steel-producing members. The data is forwarded to the Ohio Steel Council in aggregate, so the contribution of any single company cannot be determined. For more data and past data reports, visit www.ohiosteel.org.

The Ohio Steel Council is a public-private partnership designed to strengthen ties among the steel industry, the state of Ohio and its citizens. The Council’s member organizations are AK Steel Corp., Lorain Tubular Operations (of United States Steel Corporation), Mittal Steel USA, Ohio Department of Development, Ohio House of Representatives, Ohio Senate, PRO-TEC Coating Company (a joint venture of United States Steel Corporation and Kobe Steel, Ltd.), Republic Engineered Products, Inc., Stark State College of Technology, The Timken Company, United Steelworkers of America, V&M STAR, WCI Steel, Inc., Wheeling-Pittsburgh Steel Corp., Cleveland State University and The Ohio State University. For more information, visit www.ohiosteel.org.