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An analyst and top management from five sector firms examine the Steel sector in this 23-page Steel Issue from The Wall Street Transcript, available at (212/952-7433) or www.twst.com

TWST: What has gone on in steel over the past six months from a business point of view?

Mr. Parr: The market has experienced weaker than expected demand. As a result, pricing has been below expectations. Also, raw material costs, both scrap costs and natural gas prices, have been higher than expected.

TWST: Why has demand been weaker?

Mr. Parr: We normally see resurgence in demand during the first half of the year from a seasonal perspective. What has made 2003 somewhat different includes a number of things. Winter weather was much more severe than in previous years, there was a hangover from the recession, the Iraqi conflict limited seasonal upside and automotive production schedules have weakened moving into the second quarter. Nonresidential private construction has also continued to be weak. Public construction markets have been weak as state and local budgets have come under increasing pressure from the recession, and federal dollars have been diverted from infrastructure into the war effort. However, there has been one bright spot. The single bright spot has been drilling activity, which has been gaining momentum as the year has progressed. Oil drilling represents about 10% of the end-demand environment for sheet steel products. So that is one significant area of strength.

TWST: Nucor (NYSE:NUE) was an old favorite that fell slightly out of favor. Are they back to doing the right things?

Mr. Parr: Nucor, from an equity perspective, is the bellwether of the industry. It has the largest market cap in the group. Several things have impacted this stock, particularly the weakening of the construction market. Nucor has a much greater exposure to construction than U.S. Steel or Steel Dynamics. We have seen dramatic downturns in nonresidential private construction over the last several years. In addition, the company’s sheet products have been significantly impacted by pricing volatility on the spot market. We are seeing signs of construction markets stabilizing. Although we haven’t seen a recovery on the nonresidential side, things are perhaps weakening a little less aggressively than they were last year. We are also seeing signs of improved pricing discipline on the sheet side of the marketplace. Those are two positive events. Nucor has also made some major steps in consolidating the bar steel market with their recent acquisition of Birmingham. There does seem to be improved pricing discipline emerging in the bar steel market as well. All of these elements would suggest that Nucor shares should be a beneficiary as the macro environment improves and as investors’ sentiment toward the group improves. So we like this stock as well. It is a good bellwether with a strong balance sheet and a good long-term track record of execution in the market.

TWST: What are investors’ primary concerns at this juncture?

Mr. Parr: I don’t think there are any unusual concerns. The magnitude and the timing of economic recovery remain important considerations. Section 201 remains a concern. Natural gas and scrap prices are a concern. Commodity pricing is a concern. I think the investment community believes that the industry is attempting to do the right thing. There are pockets of really interesting opportunities that have emerged because of that. I think the issue is more one of timing and magnitude, which in large part will be determined by relative execution skills. As with most stocks, the biggest winners boil down to management’s ability to get the job done as advertised.

This special issue includes:

1) Outlook for Steel Companies - In an in-depth (3,500 words) Analyst Interview, Mark L. Parr, a Managing Director, Equity Research Analyst with McDonald Investments Inc., examines the outlook for the sector and shares specific stock recommendations.

2) CEO interviews (average 2,500 words). Top management of twelve - sector firms examine the outlook for their firm and the sector. Firms include:

American Access Technologies, Canam Manac Group Inc., Maverick Tube Corporation, Schnitzer Steel Industries, Soligen Technologies