AK Steel Holding Corporation
) said that it will raise the current spot market base prices for
all carbon flat-rolled steel products by $40 per ton. The move is
effective immediately with new orders.
AK Steel, like other steel makers including
U.S. Steel Corp.
Steel Dynamics Inc.
), is contending with weak steel demand, oversupply in the
industry and pricing pressure. Lower steel pricing hurt the
company's bottom line in the third quarter of 2012.
AK Steel is also hamstrung by weak construction and housing
sectors. Moreover, it is exposed to macroeconomic uncertainties,
stemming from the recessionary conditions in Europe and sluggish
growth in Asia.
AK Steel, in November 2012, said that it sees wider loss in
fourth-quarter 2012 as a hefty non-cash tax expense coupled with
lower steel pricing is expected to dent its bottom line in the
quarter. Moreover, the company expects its average per-ton
selling price to slip roughly 5% sequentially in the fourth
quarter, partly triggered by lower spot market prices for carbon
steel products as a result of weaker global economic conditions
and lower raw material surcharges.
AK Steel also noted that lower raw material costs will not
fully offset the decline in prices. Nevertheless, the company
expects shipments to increase sequentially in the fourth
AK Steel is expected to benefit from the strength in the
automotive market and higher shipment of steel products to
automakers. The company envisions shipments of carbon steel
products to automakers to surge 20% to 25% year over year in
2012. The company will release its fourth quarter results on
AK Steel currently holds a short-term (1 to 3 months) Zacks
Rank #4 (Sell).
AK STEEL HLDG (AKS): Free Stock Analysis
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STEEL DYNAMICS (STLD): Free Stock Analysis
UTD STATES STL (X): Free Stock Analysis
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