West Chester, Ohio-based flat rolled steelmaker AK Steel reported Tuesday a net loss of $40.4 million for Q2 2013, ended June 30, 2013, compared to a net loss of $724.2 million for Q2 of 2012. Net sales for Q2 2013 were $1.4 billion on shipments of 1,323,700 tons, compared to net sales of $1.5 billion on shipments of 1,335,800 tons for the year-ago Q2 and net sales of $1.4 billion on shipments of 1,289,800 tons for Q1 2013. The lower shipments for Q2 2013 compared to the year-ago period were primarily due to lower shipments to the carbon spot market and electrical steel market, partially offset by increased shipments to the automotive market.
Automotive was a bright spot for AK Steel in Q2, with auto shipments during the quarter the best since Q3 2007. Auto accounted for 45 percent of 2012 revenues and has accounted for 50 percent of revenues during the first half of 2013.
The company also said its average selling price for Q2 2013 was $1,061 per ton, an 8 percent decrease from Q2 2012 and flat with Q1 2013. The spot market remained the most challenging for AK Steel, which emphasized that the company continues to increasingly move toward a higher volume of contract business, as the "the only thing that sets you apart from the competition is price" in the spot market, said AK Steel executives. In the first half of 2013, AK Steel's contract to spot ratio was 70 percent to 30 percent.
AK Steel Chairman, President and CEO, James Wainscott noted that the company's new hot rolled coil (HRC) prices following three round of price increases are $32.50 cwt. ($716/mt or $650/nt) ex-Midwest mill--lead times are into late August for HRC and are in late September for cold rolled coil (CRC) and coated flat steel products. He later added that flat rolled inventories at the service center level reaching their lowest point in two years in June has helped carbon spot market prices, supported by a significant scrap price increase in July and the company's unexpected Middletown blast furnace outage (however, ramp up to full production at the mill is already 90 percent complete). Nevertheless, during the question and answer portion of the call, Wainscott noted that there is about $1.00-$1.50 cwt. ($22-$33/mt or $20-$30/nt) of "wiggle room" before the US begins attracting more import activity.
For the first six months of 2013, the company reported a net loss of $50.3 million, and for the corresponding six months of 2012, the company reported a net loss of $736 million.