NEW YORK AK
Steel Corp. expects to post a third-quarter loss due to costs
associated with an unplanned blast furnace outage at its
Middletown (Ohio) Works coupled with a seasonal reduction in
shipments to the automotive industry.
The West Chester,
Ohio-based steelmakers third-quarter guidance issued
Sept. 19 said it expects to incur a net loss of 22 to 27 cents
per diluted share on shipments of 1.24 million to 1.26 million
tons, down about 5.3 percent from 1.32 million tons in the
"As a result of the
outage, the companys melt production during the quarter
has been reduced, resulting in a delay of shipments to some
carbon spot market customers and an overall reduction in
shipments during the quarter," the company said.
The company expects
average selling prices to inch up 0.4 percent to about $1,065
per ton in the third quarter from $1,061 in the second quarter
due to a more favorable mix of value-added products, although
higher prices have been offset by lower raw material surcharge
and the effect of delayed shipments to customers.
A mechanical failure
earlier this summer forced the steelmaker to idle its
Middletown blast furnace (
amm.com, June 24). While the furnace came back
online in July, market sources said the outage contributed to
strength behind a number of sheet increases.
AK said it has
continued to honor its commitments to customers for
lower-priced orders placed prior to the outage on carbon spot
market shipments. As a result, AK has "not been able to realize
the full benefit of price increases in the carbon spot market"
during the third quarter.
"The company expects
to recognize approximately $14 million in insurance recoveries
during the third quarter related to the unplanned blast furnace
outage. The company anticipates there will be some additional
losses incurred and insurance recoveries recorded in the fourth
quarter," AK added.
comes after two other major steelmakersCharlotte,
N.C.-based Nucor Corp. (
amm.com, Sept. 17) and Fort Wayne, Ind.-based
Steel Dynamics Inc. (
amm.com, Sept. 18)projected stronger
financial results due to strength in certain end markets and
higher sheet prices.