Although I cover many industries at the Fool, I have to admit a special affection for steel. Why? Because nowhere else have I found competing (and supplying, and consuming) companies within a single industry to be such willing providers of the kinds of scuttlebutt that can help an individual investor figure out what's going on with the big picture.

I first noticed this back in 2004, when I began to get interested in steel companies, inspired by a Wall Street Journal article citing several companies' announced plans to ramp up their manufacturing capacity to take advantage of the sudden resurgence in profits for this industry. (I criticized those plans; that criticism was either prescient or about two years too early, depending on how kindly you look upon it.) That same year, I discovered a great source for insight into near-term steel trends in the form of scrap recycler Schnitzer Steel (NASDAQ:SCHN), which goes to great lengths to explain the ins and outs of its business to investors in its earnings releases.

This week, I found another great resource in Canadian value-added steel processor Novamerican (NASDAQ:TONS). As you may recall from Tuesday's column on its Q3 earnings report, Novamerican warned steel industry investors that it was seeing inordinately high levels of inventories piling up, both at steelmakers like Nucor (NYSE:NUE) and U.S. Steel (NYSE:X), and at processors like Novamerican itself. As I wrote then, "There are really only two ways to work through the glut. Either the U.S. auto sector must undergo a spectacular rebirth, reviving the demand side of the equation, or else steelmakers and steel importers must bite the bullet and rein in production while the industry sells down its inventories."

Guess what? They bit. Specifically, global steel magnate and Motley Fool Inside Value pick Mittal Steel (NYSE:MT) announced this week that it has decided to idle (mind the "temporary verb," as opposed to the more permanent "shutter") two of its 10 U.S. steel mills in order to avoid flooding an already saturated market. Its U.S. subsidiary, appropriately titled Mittal Steel USA, will be suspending operations at its Cleveland and East Chicago, Ind., locations for the time being.

This is significant for many reasons, not the least of which is confirmation of what Novamerican has been saying about the growing steel inventory glut. But I think the most important lesson a Fool should draw from Mittal's action is that it supports what Novamerican President Scott Jones told us in our recent interview (read an abridged version here, or take a free trial of Inside Value and see the whole interview for free). To wit, the dynamics of the steel industry have changed with the recent wave of consolidation among the bigger players. Mittal's sua sponte idling of two furnaces demonstrates how a single interested company now has the power to "manage the market" for steel so as to maintain profits for all.

Now all we need to do is sit back and see whether Mittal's gambit works.

Delve into our historical steel scuttlebutt collection in:

Or for more recent news and views, feel free to peruse our interview with Novamerican's Scott Jones.

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Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.