Stelco Announces Transfer of Hot Strip Processing to Lake Erie Mill



    Mill Achieves Record Production Following Successful Expansion

    HAMILTON, ON, April 5 /CNW/ - Stelco Inc. (TSX:STE) announced today the
transfer of all hot strip processing to its Lake Erie mill following that
mill's successful capacity expansion completed during the fourth quarter of
2006. The performance of the mill, which has been undergoing an extensive
$270 million modernization project, has continued to improve, with record
production of over 280,000 tons being achieved for March 2007. The substantial
completion of the modernization program has increased the annual capacity of
the Lake Erie hot strip mill to 3.7 million tons from 3.0 million tons. Rodney
Mott, Stelco's President and Chief Executive Officer, remarked "The employees
at Lake Erie Steel are commended for their success in both completing this
extensive project and ramping up production at an accelerated rate".
    The expanded Lake Erie Steel capacity will allow Stelco to take the next
step in its strategy to become a low cost producer by shutting down the 56"
hot strip mill at its Hamilton Steel operations. The Hamilton hot strip mill,
which has operated since the 1940's, has served the market well through the
years but has become a high cost operation with limited support from the
marketplace. The shifting of orders to the modernized Lake Erie hot strip mill
is expected to improve Stelco's overall efficiency, improve product quality
and lower operating costs.
    The implementation of this initiative will reduce the work force at
Hamilton Steel by more than 300 positions. This will occur through the
reduction and displacement of employees working directly at the Hamilton hot
strip mill, as well as the elimination of certain support services in
maintenance, shops, and coil processing. The company is planning to achieve
this reduction through a combination of retirements, layoffs and severance.
Mr. Mott stated "The Hamilton employees continue to work hard to improve
productivity and reduce costs, but it is impossible to be competitive with
obsolete equipment. The decision to reduce rolling operations at Hamilton and
to optimize Lake Erie is our best choice for ensuring Stelco's long term
success".

    About Stelco
    Stelco is one of Canada's largest steel companies. It is focused on its
two Ontario-based integrated steel businesses located in Hamilton and in
Nanticoke. These operations produce high quality value-added hot rolled, cold
rolled, coated sheet and bar products. To learn more about Stelco and its
businesses, please refer to our Web site at www.stelco.com.

    CAUTION REGARDING FORWARD-LOOKING INFORMATION

    This press release contains "forward-looking information" that is based
on Stelco's expectations, estimates and projections as of the date of this
press release or as of the date which such information is identified to be
given. This forward-looking information includes, among other things, factors
relating to the business, financial position, operations and prospects of
Stelco, including Stelco's strategies and plans to improve efficiencies and
product quality and lower operating costs and anticipated productivity levels
and profitability. Often, but not always, forward-looking information can be
identified by the use of words and phrases such as "plans", "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or states that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Stelco to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking information. Actual results, performance and achievements are
likely to differ, and may differ materially, from those expressed or implied
by the forward-looking information contained herein. Such forward-looking
information is based on a number of assumptions which may prove to be
incorrect, including, but not limited to, anticipated benefits and costs
relating to the transfer of hot strip processing operations to Stelco's Lake
Erie facilities. While Stelco anticipates that subsequent events and
developments may cause Stelco's views to change, Stelco specifically disclaims
any obligation to update this forward-looking information. This
forward-looking information should not be relied upon as representing Stelco's
views as of any date subsequent to the date of this press release.
    %SEDAR: 00001549E




For further information:

For further information: Rodney B. Mott, President and Chief Executive
Officer, (905) 528-2511, Extension 2020

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STELCO INC.

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