OHIO STEEL REPORTS STRONG PRODUCTION IN THE FIRST HALF OF 2006; BUT SOME WEAKENING OF DEMAND EXPECTED IN SECOND HALF

COLUMBUS, Ohio (October 5, 2006) –  Ohio steelmakers posted sizable increases in steel production and shipments for the first half of 2006 but expressed concerns about demand through the second half of the year.

Worldwide demand has been strong and the pricing environment stable, but the cost of energy (especially electricity), an increase in imports, and announcements by domestic automakers are leading to a cautious outlook for the second half, the Council reported.

“We’ve enjoyed a solid steel market for many months running, a reflection of our strong economy and the replenishing of inventories at the distribution levels,” said Patrick G. Tatom, president and chief executive officer of WCI Steel, Inc. “As inventories rebuild, we expect some slowing in the economy overall and in automotive in particular in the second half of the year, even though the steel market will remain healthy.”

Meanwhile, steelmakers are keeping a close eye on U.S. imports, which totaled 4.20 million net tons (NT) in July 2006, the second-highest monthly total in U.S. history, according to the American Iron and Steel Institute. Year-to-date imports are up 38 percent in the first eight months of the year, as compared to the same period in 2005.

Imports have not had a severe impact on the domestic steel industry because they have not been unfairly priced, the Council said.

In the second quarter of 2006, shipments were 4 million tons, up 9.85 percent over the same period in 2005. Production for the quarter was 3.9 million tons, up 12.82 percent over the same period in 2005.

In the first half of 2006, shipments were 8.2 million tons, up 7.49 percent from the same period in 2005. Production was 7.7 million tons, up 6.81 percent from the same period in 2005.

Capital spending was $142 million in the first half of 2006, a decrease of 10.95 percent over the year-ago period. However, capital spending was strong in the first quarter of 2006, increasing by 3.3 percent over the same period in 2005. The Ohio Steel Council is not attributing any significance to the second quarter dip and expects capital spending for 2006 to be on track with other years, barring any significant fluctuations in the market.

Employment for the first half of 2006 averaged 14,208 – 7 percent lower than the same period in 2005.

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., The Timken Company, Thomas Steel Strip Corp., 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.