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No. 3 - 2007's Red Hot Sector

Mergers, Global Demand Keep Steel Stock Trade Among 2007's Hottest

Which sector is literally red hot, right now? Steel! Demand for everything from pipes in Alaska to buildings in China sent shares of US Steel (X) up, up and away, touching a 52-week high. Is this old economy sector the new growth stock for your portfolio?

Dylan adds that Cleveland-Cliffs (CLF) also made a 52-week high today and Joe Carrabba the Chief Executive of Cleveland-Cliffs joins the guys for this conversation.

Dylan asks if the sector is at a peak?

Mr. Carrabba says far from it. CLF just announced a deal yesterday and says his company will be diversifying into coal.

Dylan asks if his company’s success is as simple as the global expansion story.

Absolutely not, replies Mr. Carrabba. He says it’s the result of expertise and planning – and he adds the cycle will continue. “China will need every mineral we can pull out of the ground.”

Eric Bolling says other companies benefiting from an increased demand for coal include Massey (MEE) which is up 4%, Arch Coal (ACI) which is up 6% and Peabody Energy (BTU) which is up 5%

Dylan asks how much of the Chinese power grid will be coal based and how much will be nuclear fired?

Eric says right now coal is 75% - but China is hoping to take that down to 50%. Mr. Carrabba explains as long as coal remains dominant his company will profit.

After the interview Eric says he loves CLF and he also loves Companhia Vale do Rio Doce (RIO) because of its up-side potential. Guy echoes Eric's recommendation.

Pete Najarian adds the options on RIO are very active suggesting global demand is gigantic.

Questions? Comments? fastmoney@cnbc.com

Trader disclosure:
On APR 4, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Bolling Owns (DIS), (ICE), (NMX), Gold, Silver Najarian Owns (DNDN), (OI), (RIO), (PDE) Strazzini Owns (BOT), (DNDN), (SNDK), (WMT), (STM), (BRCM)