"Global steel producers are thriving, and their stocks are hitting new highs," note Yiannis Mostrous and Roger Conrad, who add, "But the best is yet to come."

In the industry-leading Personal Finance, the two advisors explain, "We’re still in the early stage of a truly global bull market cycle for steel, and the companies best positioned to take advantage are headed a lot higher." Here, they look at their "Iron Five."

"As is the case with other building blocks of economic growth, steel is enjoying explosive demand from the developing world. And with the world expanding as never before, steel companies are literally selling as fast as they can produce.

"In the August 2007, we highlighted five first-rate global steel producers. Since then, they’ve returned an average of 67.4%, versus a decline of 3.7% for the S&P 500.

"The Iron Five are five picks that we believe are ripe for even bigger gains. Like the last group, these stocks are often volatile. They’re also vulnerable to the possibility of a general stock market slide and most of all to a dip in global demand growth, particularly from China.

"More important, however, all of these titans of steel are well-run businesses positioned to cash in on healthy global steel demand for years to come. The cornerstone of that outperformance: Demand for steel has grown faster elsewhere than it’s slowed in the US.

"The US is still an important consumer of steel but is increasingly less critical in driving global demand and setting the price. In the 1960s, the US accounted for roughly 40% of global demand. Today, that number is down to 10%. In contrast, China is now the 40% player, up from a 10% share in 1990.

"Topping our list is Mechel (NYSE: MTL), Russia's second-largest producer of long steel products. The company also operates in Lithuania and other countries in Central and Eastern Europe, a region that’s growing nearly as fast as emerging Asia.

"Mechel’s ace in the hole is a mining business that focuses on raw materials used to make steel, primarily coking coal, iron ore, nickel and steam coal. It’s 100% self-sufficient in coking coal, 80% in iron ore and 50% in electricity. That gives it unmatched ability to control its costs in this intensely competitive industry, where raw materials prices are surging.

"South Korea-based Posco (NYSE: PKX) is the fourth-largest steel producer and one of the lowest-cost integrated mills in the world. The company's major export destinations are China, Japan, Southeast Asia and the US, making it a major beneficiary of China’s move to consolidate its steel industry.

"The company recently inaugurated its first commercial plant based on its proprietary FINEX process, which provides the same clean, metallic feedstock as traditional blast furnaces but costs less and has fewer environmental and fixed-cost disadvantages.

"US-based Nucor Corp. NYSE: NUE) is our favorite American steel company. The US steel industry of today is much smaller than in the past but has also achieved higher profitability while becoming competitive globally.

"One of the original 'mini mills,' North Carolina-based Nucor has historically relied on small, very efficient processes and the use of scrap metal. Demonstrating its success, it’s now the second-largest US-based steel producer and this country’s largest recycler.

"Brazil-based Gerdau (NYSE: GGB) is the best-positioned player to take advantage of increasing demand for steel products in Latin America, particularly Brazil. It also has major exposure to the US market.

"The use of mainly mini-mills means that the company doesn’t use metallurgical coal which gives it a considerable cost advantage amid rising coal prices. Is also runs its own service centers and distribution channels, giving it more control over downstream costs and, consequently, profit margins.

"Luxembourg-based ArcelorMittal (NYSE: MT), which operates in 20 countries, is one of the most integrated players in the industry and boasts one of the best marketing departments.

"The company’s truly global operations are a great platform for participating in growth worldwide. It can occasionally create some problems, as some of the countries in which it operates include Ukraine and Kazakhstan. Those political risks are balanced by its sheer reach."