What: Allegheny Technologies Incorporated's (NYSE:ATI) stock declined a touch over 26% in September, extending a painful 60% plus drop that started in the middle of the year.

So What: In recent years Allegheny has been spending heavily to upgrade itself to produce even more of the high-end, specialty materials and products that it's known for. In fact, it's nearing the end of that spending cycle. Only it couldn't have come at a worse time, with a global oversupply of steel crimping prices across the industry—even for companies with a specialty focus like Allegheny.

For example, the company lost money in the second quarter leading CEO Rich Harshman to state, "Our journey to sustainable, profitable growth continues in spite of the current challenging business conditions in several of our major markets." So operationally things are progressing, but the bottom line, well, not so much.

That's why it shouldn't be too surprising that Allegheny's shares fell after several major steel industry players pre-warned of weak third quarter results. The basic story being continued pricing pressures compounded by increasing volumes of low-priced imports. Although Allegheny didn't provide an official update to its own third quarter guidance, it's easy to see why investors would expect it to face at least similar headwinds and drag its shares down along with the rest of the industry.

Now what: Although Allegheny is a steel company in many ways, it's also much more than a commodity steel maker. So, yes, it is continuing to deal with pricing pressures and its end markets are under stress, but it should be able to weather the downturn. And with a big spending push nearly done, it might even be in a better position when things start to improve. Conservative investors should probably stay clear of this cyclical company, but contrarians might find its niche focus interesting enough for a deep dive while the shares are clearly being beaten down.