JJC:    When one of the wealthiest people in the world, Lakshmi Mittal, the CEO of the largest steel producer in the world... Arcelor Mittal (MT)... tells us, as he did this very day that we're "facing, for the first time in decades, a potential shortage in steel"... well then, you know... you know the steel business is en fuego...

Of course, he's just confirming something we've suspected for a while on this show, that there's a steel renaissance going on... and I think you should be a part of it...

That's why I devoted my Penn State show, back on March 26th, to the resurgence of steel, interviewing Cramer-fave, John Surma, the great CEO of United States Steel Corp. (X), when his stock was at, let's see... $126.43. It's up about 50% since then, hitting a new high today.

There are numerous other steel plays that we also like on the show... many hitting 52-week highs...

Okay, well that's great for people who listened and bought the steels... But what if you missed, and now think that it's gone, and the golden move is finished?...

Well, let me tell you something... After hearing what Mittal said today, about a potential steel shortage, I want to get you in on another play, and it's a lesser-known steel play...

It's something that's a little removed from the actual making of steel... so, therefore, I think it still has room to run, because it isn't that discovered, all right...

So let me introduce you to GrafTech International Ltd. (GTI)... the steel play you've never heard of...

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Well, one of the reasons is that GTI doesn't make any steel at all... It makes graphite electrodes...

When you think of the things you need to make steel, like coking coal, iron... energy... graphite electrodes usually don't come up, but in certain kinds of steel making, they're just as necessary as traditional inputs.

These electrodes are used in electric arc furnaces, which steel makers use to turn scrap into fresh steel...

GTI's production goes to electric arc furnaces, so this is definitely a steel play, because that's the kind of furnace used to make steel...

How does it work?...

You need one GTI electrode, for every 8-10 hours that you run an electric arc furnace, or EAF.  And, given the strength of the steel business right now, where they're operating full tilt, presumably creating more demand for GTI's products, okay...  for their electrodes... 

The supply and demand dynamics are so good, that GTI has been able to raise prices three times... Joy Global (JOYG) and Bucyrus (BUCY) - the companies that make machines to get at coal - are the only ones that I know that have been able to put through those kinds of price increases that make equipment.  This is an overall 42% increase in prices, and they are not done... 

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At the same time - and this is terrific - there are no major increases in graphite electrode capacity to come online until 2009.  This reminds me very much of Allegheny Technologies (ATI) in 2006, which we recommended, because we knew there wasn't a lot of new titanium coming on...  Then the titanium came on, and that stock was over.  There's not a lot of GTI competition coming on...

According to GTI's management, their order book is full through 2008.  Lakshmi Mittal is talking about a steel shortage.  I think he should be talking about a GTI electrode shortage, as he would know as Arcelor Mittal (MT) is, of course, one of GTI's biggest customers.

I am not, by any means, backing away from any of the steel makers here...  The industry is so good, especially in the United States, where we have great low costs, a weak dollar, good labor negotiations, lower imports, where they're no longer dumping in this country...  So, once again, we are a net exporter of steel.  I still see these stocks going much higher... particularly, U.S. Steel (X), Reliance Steel (RS) and our fave, Nucor (NUE)... as well as Fast Money friend, Guy Adami's pick.

But now's the time to start looking for the companies that make the equipment that steel maker's need...

In terms of GTI's longer-term prospects, it looks like developing economies like China may shift toward using more electric arc furnaces, because of pollution concerns... they're actually starting to get worried...  are leaning them to develop a scrap steel recycling industry...  and these electrode furnaces are what you use to recycle scrap.   More big business down the line for GTI selling its graphite electrodes to the Chinese communists... who, by the way, are the best capitalists in the world... and even they are starting to worry about environmental damage...

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GTI has been cleaning up its balance sheet... another reason to like the stock.  The company called in its convertible note... something that should reduce its interest payments by 9 cents a share...  In other words, when you buy back your debt, you increase your earnings, okay...

Now, this $2.7 billion company is only $320.9 million in debt.  That makes it a much better buy than it used to be.

Oh, can I mention GTI's buyback?...  A repurchase authority of 3 million shares... 3% of shares outstanding... a respectable buyback...

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Now, GTI is more than just a steel play...

It's got this new technology-engineered solutions business...  It makes insulation used to produce silicon for solar panels, and graphite molds for deep-water drill bits...  Come on, man... that's a troika!   Steel, renewable energy, offshore drilling...  The engineered-solutions business is growing at 20%... great margins... maybe even better than the graphite electrodes business.

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I think GTI is pretty cheap.  The fact that this is only at 11.8x forward earnings mystifies me, given its prospects...  But it is up from $16.  I still think that it's got a long-term growth rate of 12%, and the company could do a whole lot better than that, given how strong the steel business is, and GTI's exposure to solar and drill bits.

Hey, because it's so cheap, I don't mind paying a buck and change off the 52-week high.

The steel stocks have been denizens on the new-high list forever.  We can't just say, we missed them, we missed them... because they still represent multi-year opportunities.

Here's the bottom line...

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