Nucor (NYSE:NUE), AK (NYSE:AKS), Steel Dynamics (Nasdaq:STLD), Reliance (NYSE:RS) Rated by Goldman (NYSE:GS)

Goldman Sachs (NYSE:GS) took aim at the steel industry recently, liking the potential the overall sector has in 2011, and rating Nucor Corp. (NYSE:NUE), AK Steel Holding Corp. (NYSE:AKS), Steel Dynamics (Nasdaq:STLD) and Reliance Steel (NYSE:RS) specifically.

Goldman says the steel sector may experience a boost in the early part of 2011 based on rising prices. That could attract more investors which would also help the prices move up.

"We do not believe that current weak market fundamentals reflect the true demand level or that they are sustainable," said Goldman in the report.

Even so, a weak construction industry will still hold back sales, even if there is a rally of some type in steel. Sales will more than likely stay about 25 percent below historical levels, said the Goldman analysts.

The favorite of Goldman at this time in the steel sector is Reliance Steel and Aluminum Co., which they upgraded to a "Buy." Reliance closed at $47.04, gaining $0.85, or 1.84 percent on Wednesday. Goldman raised their price target on them from $45 to $50.

Goldman also rated Steel Dynamics Inc. a "Buy." They closed at $15.94, gaining $0.27, or 1.72 percent. They have a price target on them of $20.

AK Steel Holding Corp. was downgraded to "Neutral." They closed at $13.38, rising by $0.14, or 1.06 percent. a price target of $12 was placed on them by the financial giant, lowering it from the previous $15 a share.

Nucor had a "Neutral" placed on them by Goldman. Nucor closed at $40.50, gaining $0.58, or 1.45 percent. They have a price target of $36 on them.