NEW YORK Distributor restocking helped AK Steel Corp. improve its sales of commodity stainless products in the second quarter, even as imports of Chinese commodity flat-rolled products rose dramatically.
"Commodity 300-series stainless steel sales increased as service centers began once again to replenish diminished inventory levels. However, once again, imports of commodity stainless, especially from China, increased in the second quarter to the highest level seen in the past year," chairman, president and chief executive officer James L. Wainscott said during the companys second-quarter earnings call Tuesday. "We expect more of the same in the third quarter on the commodity stainless front."
Demand for the companys ferritic stainless steels, used in automotive exhaust systems, was particularly strong during the quarter.
"We set a new quarterly record for auto chrome shipments to North American Free Trade Agreement customers in the second quarter," Wainscott said.
Value-added stainless product sales from AK Steels Coshocton Works in Ohio, which primarily go to appliance and industrial manufacturers, also rose "nicely" during the period, he said.
The West Chester, Ohio-based steelmaker shipped 227,500 tons of electrical and stainless steels during the quarter, down 7.4 percent from 245,700 tons in the same period last year but up 5.9 percent sequentially.
Electrical steel prices came under pressure in the second quarter on the back of increased international capacity (amm.com, July 24), Wainscott said.
"When you have that sort of supply-demand imbalance, particularly in the foreign marketplace, it makes for far more challenging market conditions, and weve seen that both in volume and pricing," he said, noting that significant capacity has come online "in China and around the world."