Just over a month after hiking price of specialty stainless
AK Steel Holding Corp.
) has recently announced a price increase on the rest of its
stainless steel products, effective with shipments from Jan 1,
A discount of 2 percentage points for these stainless steel
products will aid in the price increase. For all products
including automotive exhaust products priced using net prices,
the increase will be achieved by adding $0.02 per pound to the
existing prices. Surcharges will be applicable on all stainless
Earlier on Nov 22, AK Steel had hiked 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.
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 increases to consumers.
Furthermore, overcapacity, glut in cheaper Chinese steel imports,
economic conditions and shifts towards 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. Excluding 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. The company should
benefit from the strength in the automotive market and higher
shipment of carbon steel products to automakers.
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, a prominent player in the steel industry along with
), currently carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the steel and related industries include
Companhia Siderurgica Nacional
United States Steel Corp
). While Companhia Siderurgica holds a Zacks Rank #1 (Strong
Buy), United States Steel retains a Zacks Rank #2 (Buy).
AK STEEL HLDG (AKS): Free Stock Analysis
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