West Chester, Ohio-based flat rolled steelmaker AK Steel reported a net loss of $3.5 million in Q3 2011 in part due to a $6.2 million expense for costs related to an incident that damaged the company's electric arc furnace (EAF) at the Butler Works plant on July 1. But even without the expense, earnings still fell significantly in Q3 from Q2 net income of $33.1 million, but were up from a net loss of $59.2 million in Q3 2010.
Sales fell to $1.585 billion on shipments of 1,368,000 tons, compared to 1.46 million tons sold in Q3 2010 and 1.5 million tons sold in Q2 2011, but selling prices fell about 2 percent in Q3; based on statements made by the top executives at AK Steel during the conference call, continued declines are anticipated.
James L. Wainscott, President and CEO of AK Steel noted that in Q3, people ordered less steel, but raw material costs remained high. As a result, AK "dialed down production" and inventories to reflect the lower demand levels, and only "had sufficient orders" to operate at about 80 of capacity, compared to 87 percent in Q2. The average steel industry utilization rate is about 72-75 percent according to data from the American Iron and Steel Institute (AISI).