NEW YORK AK Steel Corp. expects to see a significant financial improvement this year compared with 2012 as a result of at least $150 million in savings from lower raw material and energy costs.
"The (fourth) quarter concluded a challenging year for AK Steel and for the steel industry in general," chairman, president and chief executive officer James L. Wainscott said during a Jan. 29 conference call. "Weak economic conditions contributed to lower sales and production levels. Coupled with excess steelmaking capacity, increased steel imports and lower average selling prices negatively impacted both our fourth-quarter and full-year financial results."
He said 2012 was a year of waiting, "including waiting for a path forward on the European debt crisis ... waiting for the Chinese leadership transition, waiting for a resolution to the U.S. fiscal cliff issues ... and waiting for a clear path for global growth. Were delighted to say goodbye to 2012 and hello and welcome to 2013."
A highlight moving forward for the West Chester, Ohio-based steelmaker includes lower raw material and energy costs, largely from coal, coke and iron ore, which could save the company more than $150 million, Wainscott said. The steelmaker said it has locked in all of its coal requirements for 2013 at "substantially lower prices" than in 2012.
AK Steel also expects to operate at higher rates this year due to improved demand and greater market share in the automotive sector.
"Even with global economies remaining in slow recovery mode, each of the items ... gives us comfort that we can and will deliver significant first-quarter and full-year 2013 results," Wainscott said.
The automotive market was a bright spot last year for AK Steel, which increased its auto business by about 20 percent and gained market share, he said.