Personal Thoughts - US Steel

I have been watching steel for awhile, and most of the biggies had P/Es of less than 7 back in August. While USX looks good, I think its caught in the middle for size and value. Sure, they have cash on hand, however, China is expected to be a net exporter in 2006, with additional capacity coming online. I assume that this will hit USX a little harder to the bottom line, than what is being predicted, along with an expected drop in steel prices into Q2, to something below $500 US. I think USX may end up being someone's strategic partner sometime in 2006, before it goes on a spending spree for anyone in particular, and I don't think USX can get the same price as Dofasco. They must be due for some capital upgrades, so they will need the cash for that. Maybe a merge with AK? Anything is possible these days.