Boston, MA 10/31/2013 (wallstreetpr) – AK Steel Holding Corporation (NYSE:AKS), during the earnings call, stated that the company Middletown Works Blast Furnace could not operate at the rated capacity utilization untill the current month. The Middletown Works is the company’s largest steel plant, which had faced problems pertaining to the mechanical failure starting June 2013. Since the failure, the company is unable to run its blast furnace at rated capacity thereby impacting its overall production volume.
As a result of the failure, the company had to take a drastic step and had to shutdown its unit. The blast furnace is the process wherein the iron ore (Fe), fuel (coal), limestone, and other auxiliary consumptions are heated, which is then followed by a reduction of gases to manufacture hot metal.
At the beginning of 4Q13, there had also been a three day-long outage in order to discuss the productivity hit. The downtime of the blast furnace resulted in a decline in overall production and had also impacted the total steel shipments available for sale in the last quarter. As a result of lower production, there had been a rise in the cost of production per ton.
It is believed that the company was not in the position to take the benefit of the increase in steel prices in last quarter (res-stocking of steel) due to lower volumes. Besides, production, cheap imports from China, Taiwan, Korea, Japan, Sweden, and Germany are causing a dent on the company’s overall profitability. The stated countries accounted for almost 90% of the imported steel in 2012 in Non-oriented Electric Steel segments.
The company has filed an anti-dumping duty petition with the U.S. International Trade Commission pertaining to low price imports from all the countries stated above. The commission would investigate the matter before imposing any duty on imports. It would first check whether the said dumping or cheap imports had an impact on the U.S. steel companies.
