World-Class Steelmakers positioned to win. Winners get stronger. Losers get weaker.

WSD’s “world-class” system was initiated in 2002 when we observed that many steel companies had enhanced their competitive position notwithstanding, and/or because of, the more difficult industry environment. Yet, investors seemed to be almost universally negative about the group. (Note: In fact, when Peter Marcus left PaineWebber in early 1999 with the World Steel Dynamics’ team, the number of institutional investors interested in the steel group had diminished to such an extent that PaineWebber no longer really prized his services as its steel analyst. Thank you, PaineWebber.) WSD thinks that the steel industry contains many well-managed companies because those that moved ahead had to overcome difficult industry conditions from the late 1970s to 2002. If a company was to be in the “winning” category, it needed to implement many correct decisions about facilities, market emphasis and mergers and acquisitions. We like to say that managements became “age hardened” during these difficult years (the “Old Continuum”). In the Old Continuum, pricing conditions tended to be 70:30 in the favor of steel buyers. Since early 2004, the start of the New Continuum, we think that the odds have shifted to 30:70. WSD observes that many steel companies seem to be ahead of their customers when it comes to understanding and employing the strategies to take advantage of the new realities of the marketplace. In March 2007, after publishing 11 prior “world-class” reports using our original rating system and/or minor variations to it, WSD added new categories of ratings including: a) size; b) location in high-growth markets; and c) dominance in mature markets. We also changed the individual weightings for a number of the other items. In general, the ratings reward those companies that: a) have a pro-active management; b) are expanding capacity; and c) are integrated from raw materials to downstream products. To see the complete list of "winners", sign up now as a WSD subscriber.