West Chester, Ohio-based steelmaker AK Steel reported significantly improved financial results for Q1 2011 Tuesday, and remains confident that overall 2011 will be better than 2010, and the flats market in particular will remain strong.
For Q1 2011, AK Steel reported a net income of $8.7 million compared to a net loss of $98.3 million in Q4 2010, and a net income of $1.9 million in Q1 2010. Steel shipments were up annually as well, rising from 1,385,000 net tons in Q1 2010 to 1,423,100 net tons in Q1 2011.
Average selling prices in Q1 2011 were up about 9 percent to $1,109 per net ton according to AK Steel, as increases in the average selling price resulted primarily from a richer product mix and higher contract and spot market selling prices.
When asked about the sustainability of current flat-rolled prices, AK Steel executives maintained that although they have seen recent cautious buying from their customers in anticipation of additional supply coming on, the concern is "more psychological than anything," and with "low inventories and stubbornly high import costs," flats prices will "stabilize, if not rise from here."
In their outlook for Q2, AK Steel said it expects Q2 2011 shipments to be between 1.5 to 1.55 million net tons, and the average per-ton selling prices to be up 7 percent compared to Q1 2011. During the question-and-answer portion of the conference call, AK Steel also added that its Butler, Pennsylvania Works project-which melted its first heat of steel in early March-will be ramped up to full capacity in Q2.