NEW YORK AK Steel Corp. is said to be effectively out of the spot market for certain steel sheet products, particularly cold-rolled coil, due to major backlogs that have pushed lead times for some products into the summer.
At least three customers of the steelmaker told AMM this week that mill representatives had informed them that cold-rolled coil lead times were into the May-to-June time frame, possibly further, a far cry from other steelmakers offering the same product in the four- to seven-week range.
AK "does not comment on rumors," a spokesman for the West Chester, Ohio-based company said via e-mail.
Sources indicated that AK has been late in delivering product in the months following an unplanned blast furnace outage at its Middletown, Ohio, plant in late June (amm.com, June 24). While the outage occurred in the melt shop, the bottleneck seems to be downstream for its cold-rolled and galvanized products. That product is used in the auto industry, in which AK Steel is heavily invested.
AK has been a big proponent in moving more of its tonnages into contract business, chairman, president and chief executive officer James L. Wainscott said in October during the companys third-quarter earnings call (amm.com, Oct. 22).
That intention to move further into contract business over spot, coupled with a strong automotive sector and a bottleneck after the outage, have contributed to the longer lead times.
"When AK is slow, they come knocking on my door. But now theyre not," one East Coast cold-rolled buyer said. "Their spot orders are well into June and theyre very busy catching up. Theyre saying theyre busy and orders are good, but no one is talking about what price theyre selling for."
AK hasnt aggressively sold hot-rolled product either, a Midwest buyer said, adding that he has received "a couple of calls from other mills losing business, but theres been nothing from AK."
The companys extended lead times could be good news for steelmakers in the Midwest, particularly as strong order books have kept the cold-rolled and cold-rolled substrate markets tight.
"As you know, AK had that big outage last year. And from everything were being told, they never really caught up. This is partially because they tried to keep their contract business primarily automotive. They finally moved their order books all the way heck out there to be caught up," one trader told AMM. "The other mills seem to have very solid lead times, but the cold-rolled market appears to be one of the strongest right now."