Furnace Outage Keeps AK from Taking Advantage of Higher Spot Prices
AK Steel is expecting a loss for the third quarter that includes approximately $12 million uncovered by insurance related to an unplanned furnace outage in the third quarter. In its guidance released Thursday, the company said the blast furnace outage at Middletown Works reduced shipments to between 1,240,000 to 1,260,000 tons compared to 1,323,700 tons in the second quarter. Seasonal slowdown to the automotive market also played a part in reduced shipping volumes.
Average selling prices in the third quarter were about $1065/ton, up slightly from $1061/ton in the second quarter. AK said it was unable to take full advantage of price increases in the carbon spot market because of commitments to customers for lower priced orders before the outage and the reduced ability to ship afterwards.
Planned maintenance costs dropped in the third quarter to $5 million compared to $21.6 million in the second quarter. AK Steel is also expecting non-cash income tax expense of $7 million related to changes in the company’s LIFO reserve.
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