AK Steel Holding Corporation
) will hike the base prices for all martensitic products,
precipitation hardening (PH) products, tensile rolled products,
duplex products, bright annealed products and custom melt
products or grades that are specific to the company.
The price hike of these specialty stainless steel products will
be effective with shipments from Jan 1, 2014. A reduction in the
discount of 2 percentage points for these specialty stainless
steel products will allow the price increase. Surcharges will be
applicable on all stainless steel products.
Prior to this, AK Steel had raised its base prices for all 200,
300 and 400 series flat rolled stainless steel products on Jul
30, 2013, which was effective with shipments till Aug 1, 2013. AK
Steel also hiked the price depending on a reduction in the
functional discount of 2 percentage points for cold rolled and
hot rolled non-automotive exhaust products.
From the steel industry's perspective, steel prices are
generally volatile owing to the highly-cyclical nature of the
global steel industry. Rising raw material prices have a direct
impact on steel prices as higher raw material prices induce a
corresponding increase in steel prices.
However, in the wake of lower demand, it becomes increasingly
challenging to pass on raw material price hikes to consumers.
Furthermore, overcapacity, glut in cheaper Chinese steel imports,
economic conditions and shifts toward other substitutes
significantly impact steel prices.
AK Steel posted a net loss of $31.7 million or 23 cents a
share in third-quarter 2013, roughly 48% narrower than a loss of
$60.9 million or 55 cents a share a year-ago. Barring one-time
items (tax charges related to a valuation allowance for deferred
tax assets), AK Steel's loss for the quarter was 12 cents per
Revenues fell 9% year over year to $1,331.3 million in the
reported quarter due to lower shipments.
AK Steel expects results to improve sequentially in the fourth
quarter. AK Steel should benefit from the strength in the
automotive market and higher shipment of carbon steel products to
The company is also investing to internally procure about half
of its iron ore and coal requirements. However, concern remains
about the soft construction market and the weak steel pricing
AK Steel currently retains a Zacks Rank #3 (Hold).
Other companies in the steel and related industries with
favorable Zacks Rank are
Companhia Siderurgica Nacional
United States Steel Corp.
Mueller Water Products, Inc.
). While Companhia Siderurgica holds a Zacks Rank #1 (Strong
Buy), both United States Steel and Mueller Water retain a Zacks
Rank #2 (Buy).
AK STEEL HLDG (AKS): Free Stock Analysis
MUELLER WATER (MWA): Free Stock Analysis
CIA SIDERUR-ADR (SID): Free Stock Analysis
UTD STATES STL (X): Free Stock Analysis
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