AK Steel Posts Second-Quarter Loss
07/29/2015 - AK Steel lost $64 million in the second quarter as competition from imported steel continued to drive down prices, the company has reported.
On the quarter, the company reported net sales of $1.69 billion and shipments of 1.81 million tons. In the same quarter last year, the company posted net sales of $1.53 billion on shipments of nearly 1.4 million tons. Shipments also improved slightly on a quarter-over-quarter basis.
“Continued strength in the automotive market contributed to an overall increase in automotive market and total shipments quarter-over-quarter for the company,” said Chairman and CEO James L. Wainscott. “Unfortunately, however, continued high levels of what we believe are unfairly traded imports significantly impacted selling prices in the carbon steel spot market, which negatively impacted the company’s results.”
The company said that the second-quarter increases in shipments and sales were largely due to the addition of shipments from its recently acquired Dearborn Works and strong shipments of carbon and stainless products to the automotive market.
Despite the increased tonnage, the average sales price dropped 7 percent from the first quarter to $931 per ton. The drop, the company said, was the result of a shift in the product mix, with shipments to the carbon spot market accounting for a greater percentage than value-added products.
And the pricing in that market generally declined throughout the first half of 2015, although it recovered slightly toward the end of the quarter, the company said.
"AK Steel believes the substantial decline in carbon spot market selling prices is primarily the result of increased imports of lower priced foreign steel. The lower carbon spot market selling prices, combined with the higher proportion of hot-rolled shipments following the Dearborn Works acquisition, were the primary factors resulting in a 15 percent decline in the company’s average selling price for the second quarter of 2015 compared to the second quarter of 2014," the company said in a statement.
AK Steel is one of five U.S. producers that have filed trade complaints with the Department of Commerce and the International Trade Commission, alleging that producers from eight countries are dumping cold-rolled steel products.
Also during the quarter, the company broke ground on its new Research and Innovation Center. It also iis continuing to progress on modifications to the hot dip galvanizing line at its Dearborn Works. The company said new process technology will allow for the production of both coated and cold-rolled, next-generation, advanced-high-strength steels on the same line.
The new technology also will produce significantly improved formability at higher ultimate tensile strength levels, which provides automotive customers greater opportunities for lightweighting. The project is set for completion by the end of 2016.
For more details about the company's earnings, click here.
“Continued strength in the automotive market contributed to an overall increase in automotive market and total shipments quarter-over-quarter for the company,” said Chairman and CEO James L. Wainscott. “Unfortunately, however, continued high levels of what we believe are unfairly traded imports significantly impacted selling prices in the carbon steel spot market, which negatively impacted the company’s results.”
The company said that the second-quarter increases in shipments and sales were largely due to the addition of shipments from its recently acquired Dearborn Works and strong shipments of carbon and stainless products to the automotive market.
Despite the increased tonnage, the average sales price dropped 7 percent from the first quarter to $931 per ton. The drop, the company said, was the result of a shift in the product mix, with shipments to the carbon spot market accounting for a greater percentage than value-added products.
And the pricing in that market generally declined throughout the first half of 2015, although it recovered slightly toward the end of the quarter, the company said.
"AK Steel believes the substantial decline in carbon spot market selling prices is primarily the result of increased imports of lower priced foreign steel. The lower carbon spot market selling prices, combined with the higher proportion of hot-rolled shipments following the Dearborn Works acquisition, were the primary factors resulting in a 15 percent decline in the company’s average selling price for the second quarter of 2015 compared to the second quarter of 2014," the company said in a statement.
AK Steel is one of five U.S. producers that have filed trade complaints with the Department of Commerce and the International Trade Commission, alleging that producers from eight countries are dumping cold-rolled steel products.
Also during the quarter, the company broke ground on its new Research and Innovation Center. It also iis continuing to progress on modifications to the hot dip galvanizing line at its Dearborn Works. The company said new process technology will allow for the production of both coated and cold-rolled, next-generation, advanced-high-strength steels on the same line.
The new technology also will produce significantly improved formability at higher ultimate tensile strength levels, which provides automotive customers greater opportunities for lightweighting. The project is set for completion by the end of 2016.
For more details about the company's earnings, click here.
