NEW YORK AK
Steel Corp.s blast furnace in Middletown, Ohio, has been
temporarily idled due to an unexpected mechanical failure, the
company said June 24.
No injuries were
reported, the West Chester, Ohio-based steel producer said, but
the mills only blast furnace was taken offline June 22 in
order to prevent further damage following the incident, AK
"At this time, the
company does not have a specific estimate of the cost or an
exact date for completion of the repairs, though it currently
expects to complete the repairs as early as sometime in July,
though the repairs may be completed later in the third
quarter," the steelmaker said.
"Prior to the
completion of the repairs, the company will utilize its Butler
(Pa.) Works electric-arc furnace and its Ashland (Ky.) Works
blast furnace and, to the extent necessary, purchase merchant
carbon slabs to service its customers," AK Steel added.
The company said that
it has both property damage and business interruption
insurance, and predicts that its uninsured losses will be
between $10 million and $27.5 million. The outage will impact
both the second- and third-quarter shipments and financial
results, it added.
While an AK Steel
spokesman told AMM in an e-mail that the company is
still assessing the schedule and cant comment on the
exact timing of the outage at this point, customer sources
noted that the furnace was expected to be offline for a minimum
of three to four weeks. However, two sources called that
timeline "aggressive" since they estimated purchasing new
equipment would take closer to six weeks.
"What our intel said
is that they should be down for a minimum of four weeks,"
according to one Midwest service center source who buys from AK
Steel. "They were already behind on orders because of their
automotive activity. With this happening, lead times are going
AK Steel said in
recent earnings guidance that its second-quarter results would
include charges related to a planned seven-day maintenance
outage at its blast furnace in Middletown, the first major
maintenance outage for that furnace since a reline in 2009 (
amm.com, June 17). The company didnt have
any other planned blast furnace maintenance outages for the
remainder of 2013, it said.
The AK Steel spokesman
added that the planned outage had already been completed.
Some market sources
predicted that the outage will help solidify the latest round
of sheet price hikes, with some noting that a third round of
sheet increases might already be in the works. With supply
being taken offline, sources said it could help change the
supply-demand fundamentals in a recently oversupplied
"This is a sign of
another price increase to come," a second Midwest service
center source said. "Itll come soon."