Ahead Of The Bell: Steel Sector

She expects AK Steel Holding to post losses for the rest of 2009 as utilization rates remain below normal. Her estimate for the year is a loss of $1.48 per share.

Despite AK Steel's exposure to the struggling U.S. auto industry, Guido said the company is her "top pick" in the natural resources sector.

Shares of Cliffs Natural Resources fell 78 cents, or 2.6 percent, to $28.75 in premarket trading while shares of AK Steel fell 64 cents, or 3 percent, to $20.50.

Earlier this week, analyst Mark L. Parr of KeyBanc Capital Markets upgraded Pittsburgh-based U.S. Steel and Olympic Steel Inc. of Cleveland to "Buy" from "Hold."

He said prices are rising for flat-rolled steel — a sheet-like product used in autos and appliances — into the June and July period as plants "begin to gradually re-engage the market," he said in a note to investors.

Parr also said the dollar is weakening, boosting competitiveness of U.S. manufacturers. A weak dollar makes U.S. goods less expensive overseas.