During West Chester, Ohio-based AK Steel's quarterly conference call Tuesday, AK Steel Chairman, President and CEO James L. Wainscott emphasized repeatedly that soaring raw materials costs were a huge factor in the company's quarterly loss, and that AK Steel is still working to recover costs from raw materials such as higher than usual prices for scrap and coal, as well as above average prices for iron ore. Wainscott was still optimistic for the upcoming year, however, commenting that "AK Steel is poised for the road to recovery in 2011."
During Q4 2010, AK Steel reported a net loss of $98.3 million, down 39.8 percent compared to a net loss of $59.2 million in the previous quarter and a net income of $39.8 million in Q4 2009-a 140.5 percent year-over-year decline. For Q4 2010, AK Steel reported an operating loss of $154.6 million compared to an operating profit of $87 million for Q4 2009.
For the full-year 2010, AK Steel reported a net loss of $128.9 million compared to a net loss of $74.6 million for the whole of 2009, however shipments for the full year of 2010 were up 20 percent from 3,935,500 nt shipped in 2009 to 5,660,900 shipped last year.
Currently, for its carbon steel products line, AK Steel's business is approximately 50 percent contract and 50 percent spot market, according to Wainscott, but the company is working to grow its contract business. During the question-and-answer portion of the conference call, Wainscott mentioned that in regards to the rapid run-up in flat-rolled carbon steel pricing in November and December of last year, "we (AK Steel) believe this thing has some legs" and the company expects average selling prices to be higher in Q2 than Q1 due to the company announcing six increases since November 1, totaling about $250/nt. Wainscott also noted that for its carbon business, AK's order books are already open for April, but still have some room in late March for spot tons of hot and cold rolled coil.
For the whole of 2010, AK Steel's average capacity utilization rate was approximately 84 percent, compared to 58 percent in 2009, and the company continues to benefit from the recovering automotive sector.