HAMILTON, ON, Jan. 25 /CNW/ - Stelco Inc. (TSX:STE) today issued an information update on the Phase 2 upgrade of the Lake Erie hot strip mill. This upgrade is one of the critical capital investment programs identified in the Company's 4-point strategy announced in July 2004. It is designed to increase hot roll capacity, improve production quality, enable Stelco to close its obsolete 56" mill in Hamilton, and contribute to the Company's financial performance by reducing costs. The new equipment associated with the current stage of the upgrade has been installed, is operational, performing extremely well, and the Company is confident that the upgrade's strategic objectives will be achieved. The implementation of this stage of the upgrade process has taken longer than anticipated, primarily as a result of the complex task of integrating the related control software as part of the commissioning process. Despite the delays, it is still expected that this commissioning process will be completed by the end of the first quarter of 2006. The operation of the mill is improving on a weekly basis and is currently operating at 80% of the anticipated production capacity that is expected to be achieved for this stage of the project. Stelco noted that the installation and commissioning delays associated with this stage of the upgrade program will have a short-term negative impact on the facility's overall production, the volume and mix of products shipped, and the Company's revenue from sales. These items will impact the fourth quarter of 2005 and the first quarter of 2006. About Stelco Stelco Inc. is a large, diversified steel producer. Stelco is involved in major segments of the steel industry through its integrated steel business, mini-mills and manufactured products businesses. This news release may contain forward-looking information with respect to the Corporation's business operations, financial performance and conditions. Actual results may differ from expected results for a variety of reasons including factors discussed in the Corporation's Management's Discussion and Analysis section of the Corporation's 2004 Annual Report. To learn more about Stelco and its businesses, please refer to our Web site at www.stelco.ca. %SEDAR: 00001549E