Steel and steel-related stock performance outperformed the S&P 500 in July. The S&P Steel Supercomposite Index was up 9.6% against a 6.9% increase for the S&P 500 during the month. Some 27 stocks outperformed the broad market while 14 underperformed. Nineteen stocks advanced by 10% or more with only four securities posting a negative return for the month. July was highlighted by an 85.5% increase for Samuel Manu-Tech (take-out driven) and a 42.7% gain for Universal Stainless ( USAP) and Alloy ( ALOY). The two worst performers during July were Insteel ( IIIN) and Metals USA ( MUSA), down 20.1% and 17.1%, respectively. Sub-Group Performance Shows Broad Strength. Specialty steelmakers posted the largest increase in July -- rising 24.1% -- while the raw materials providers and blast furnace steelmakers registered gains of 14.0% and 12.0%, respectively. The service center group also outperformed, up some 14.5%, buoyed by an 85.5% gain in shares of Samuel Manu-Tech after it agreed to be taken private late in the month. Excluding Samuel, the group still registered a 5.6% advance. The underperformers were the mini-mill steelmaker index, up 6.1% in July, and pipe & tube stocks which posted a small 2.5% advance. Given the leveling off in pipe prices over the last month, the smaller gains for this sub-group are not surprising. Over the past 12 months, only the mini-mill sub-index trailed the broader market, posting a 5.8% gain versus the S&P 500's 11.6% advance. Outlook. We believe that steel prices are past their bottom in China and this will drive global pricing to begin to improve in coming weeks. However, we remain concerned about recent trade press reports that Chinese mills are sidestepping the government's attempts to make exporting excess production less attractive. Critical to our thought process is a leveling off of exports from China, and in order for that to happen, we do need to see production remain at current - and lower - levels. We remain optimistic that we'll see meaningful improvements in pricing in coming months.