Stelco Inc.’s court-appointed Monitor has filed its thirty-seventh report regarding the company's Court-supervised restructuring. The Report provides updated information regarding Stelco’s restructuring plan and restructuring agreement with the Province; Stelco’s request for further extension of the stay period; and Stelco’s operating performance and current market conditions.

Regarding Stelco’s restructuring plan, the Report reviews the documents filed with the Court on September 20, 2005. These documents included a restructuring plan and a restructuring agreement with the Province of Ontario relating to the funding of the company's pension plans. The Report notes that several motions are being brought by the company, seeking authorization to enter into the restructuring agreement, authorization to file the restructuring plan, and authorization to call, hold and conduct meetings of affected creditors. The Monitor states its view that it is appropriate that the plan be submitted to affected creditors for their consideration and that the calling of meetings is the appropriate next step in the restructuring process. As a result, the Monitor recommends that the Court accept the plan for filing, grant the Meeting Order and authorize Stelco to enter into the restructuring agreement.

The Report notes that Stelco will seek an extension of the stay period from September 23, 2005 until December 2, 2005. The Monitor recommends that the request be granted in order to maintain stability until the meetings of affected creditors have been held, and on the grounds that an extension is in the interests of all stakeholders.

The Report reviews the second quarter results released on August 4, 2005, the financial performance of the company and its subsidiaries, and Stelco's liquidity position. It also lists a number of factors that contributed to the consolidated operating results during that period.

The Report indicates that, as of the end of August, 2005, year-to-date consolidated production of semi-finished steel totaled 3,242,000 net tons, compared to 3,617,000 recorded during the same period in 2004. Consolidated production in each of July and August 2005 totaled 348,000 net tons and 341,000 net tons respectively. The Report attributes the year-to-date decline to a softening in steel market demand and operational issues at the Hamilton blast furnace.

For the year-to-date as of the end of August 2005, consolidated shipments totaled 3,018,000 net tons, compared to 3,317,000 net tons during the same period in 2004. Consolidated shipments of all products in July and August 2005 totaled 296,000 net tons and 397,000 net tons respectively. The Report attributes the year-to-date decline to a softening in steel markets.

The Report also notes that there has been a stabilizing of demand and an improvement in North American steel pricing in recent months. The Monitor notes that natural gas prices have increased dramatically, which has a substantial impact on Stelco's costs. The Report adds that Stelco's future financial results will be highly dependent on the direction of the company's input costs (which have been very volatile during the past year) as well as the strength of North American steel markets.

The Monitor also reviewed cash flow results for the company and its CCAA-covered subsidiaries between June 11, 2005 and September 9, 2005. The Report provides cash flow forecasts for the same entities between September 10, 2005 and December 2, 2005. The Report notes that Stelco will not have to draw upon its debtor-in-possession financing during this period.

Stelco Inc. is a large, diversified steel producer involved in major segments of the steel industry through its integrated steel business, minimills, and manufactured products businesses.