Even though it's pretty common to talk about steel markets and steel companies as though "steel is steel," that's not quite the case. The dynamics facing companies like Mittal Steel (NYSE:MT) and Posco (NYSE:PKX) are different from those at Nucor (NYSE:NUE), which are in turn different from those at smaller players like Steel Dynamics (NASDAQ:STLD) and Oregon Steel (NYSE:OS).

So today we'll look at Oregon Steel, which is a smaller company focusing more on specialty products like plate, rail, and tubular products. Oregon Steel reported earnings last week. The news at the end of the fourth quarter was mixed: Fourth-quarter results weren't all that spectacular, but the company had news that definitely improves the near-term outlook.

Sales were up 8% in the quarter, as the company saw a modest increase in average pricing (up 3%) and a slightly better increase in shipments (about 5.5%). Sales and production results could have been better, though, if it weren't for some installation and start-up events that disrupted production.

Profitability was lower in the quarter -- primarily because of some start-up expenses, higher conversion costs, and lower selling prices for some types of steel products. Operating income (before items) fell about 21% on an absolute basis and about 24% on a per-ton basis. Likewise, net income was meaningfully lower in the period, although the company was still quite profitable.

The really good news was that the company received an order for at least 510,000 tons of large-diameter pipe for a pipeline project that will begin in mid-2007 and stretch from Wyoming to Ohio. While the customer here is officially Rockies Express Pipeline LLC, the pipeline is a project between Kinder Morgan Energy Partners (NYSE:KMP), and Sempra Energy (NYSE:SRE). This deal includes an option for an additional 350,000 tons of pipe and should keep the company at or near capacity for large-diameter pipes through 2008.

Oregon Steel doesn't look all that cheap these days, particularly now that there's a lot of talk that a larger steelmaker may be looking to buy this company. I'll grant the possibility that this energy-related upswing may last longer than many people think today, but it seems to me that further gains in the stock will have more to do with momentum and rumor than fundamental underlying value.

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Fool contributor Stephen Simpson owns shares of Mittal Steel but has no financial interest in any other stocks mentioned (that means he's neither long nor short the shares).