For the final installment of steel week, what could I pick but US Steel (X)?  As one of the early steel producers, they've grown over the years to employ over 44,000 people worldwide.  The company is strong; the only question is, should investors buy now?

US Steel is fixed in the common psyche as a known name, a steel giant.  It has an image of security, and this counts as part of its value.  People trade in this stock a lot; its average daily volume is 35,173 shares.  At its current price, that means nearly four million dollars worth of US Steel changes hands every day.  This is good, because every time shares change hands, the stock's value changes slightly, and its market price reflects the results of an aggregate of these point changes.  High trading volume means quicker market reaction to events and news.

So, as long as there is good news, the stock will go up.  At the end of October, they announced the completion of the Stelco purchase.  The day after, there was a small spike, after which the price fell by approximately 15% over several days, although the fall could be the result of other factors.

US Steel took out $900 million in loans to buy Stelco, $400 million of which is due a year from the loan instatement date.  Right now this acquisition is one of the key variables in the stock price equation, since they have to pay those loans back.  Thus, the current strength of Stelco is a good indicator of US Steel's future direction.

Finding information on Stelco as a separate company is difficult now.  However, it is known that Stelco has long competed with another Ontario-based steel company, Dofasco.  Dofasco is attached to Arcelor Mittal as a stand-alone subsidiary, so unlike Stelco you can still find information on them.

It looks like the battle in Ontario is going to be US Steel vs. Arcelor Mittal, acting through Stelco and Dofasco.  Mittal got there first, though, in February of 2006, and the smaller Canadian companies were competing between themselves long before that.

It's tough to be down on US Steel, but I'm not completely confident they'll win this venture.  They've got an uphill battle, at the very least, and they have less than a year to set aside $400 million, plus interest, to repay their acquisition loan.  Right now my attitude is 'wait-and-watch'.