NEW YORK, NY -- (Marketwire) -- 04/26/12 -- Despite posting some disappointing numbers for the first quarter the Steel Industry remains optimistic for the rest of 2012. The recent boom in drilling in the oil and gas industry, caused by rising oil prices, as well as a rejuvenated demand for vehicles, have been contributing factors for the soaring demand for steel. "We haven't had this kind of expansion in steel since the 1980s," said Eric Burkland, the president of the Ohio Manufacturers' Association. The Paragon Report examines investing opportunities in the Steel Industry and provides equity research on United States Steel Corporation (NYSE: X) and AK Steel Holding Corporation (NYSE: AKS).
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Auto Manufacturers in the U.S. are one of the largest consumers of steel. According to monthly sales figures and industry estimates, automobile sales are expected to total 13.8 million cars and light trucks, and could reach 15 million by 2014. Sales had previously plunged to 10.9 million in 2009 as a result of the recession. The surge in oil and gas drilling was the biggest surprise for the steel industry. New drilling procedures have made it practical to drill into the dense and deep hydrocarbon-rich shale beneath the Great Plains, the Gulf Coast, the Rocky Mountain West and the Mid-Atlantic States. Tapping into these reserves requires large amounts of steel pipe as they generally lie a mile or more beneath the surface.
"The need for specialty steel, much of it for oil and natural gas producers, is high in the United States and around the world," said Salvatore J. Miraglia Jr., the president of Timken's steel group. "We see demand in that market continuing to be healthy for quite some time."
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United States Steel Corporation recently announced that the Board of Directors declared a dividend of five cents per share on U. S. Steel Common Stock. The dividend is payable June 9, 2012, to stockholders of record at the close of business May 9, 2012.
AK Steel reported a net loss of $11.8 million, or $0.11 per diluted share of common stock, for the first quarter of 2012 compared to net income of $8.7 million, or $0.08 per diluted share, for the first quarter of 2011 and a net loss of $193.9 million, or $1.76 per share, for the fourth quarter of 2011. The fourth quarter 2011 loss included a non-cash pre-tax pension corridor charge of $268.1 million, or $1.50 per diluted share.
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