AK Steel Holding Corporation (NYSE:AKS) stated that it is increasing existing spot market base prices for carbon flat-rolled steel items. The steel maker is raising the prices of these items by at least $40 per ton. This hike is effective straightaway with new orders.
AK Steel’s earnings for 3Q2016 were able to surpass the Zacks Consensus projections. Sales declined in double digit year-over-year, but surpassed projections. Shipments for the quarter declined 24% year over year to over 1.425 million tons.
The company is well placed to achieve from growing strength in the automotive industry and higher shipment of steel items to automakers, by improved automotive builds. Robust demand for the firm’s stainless steel and carbon items from its automotive clients is projected to continue in the balance of FY2016.
AK Steel is putting emphasis on de-emphasizing commodity items and introducing new products, such as its lately reported Nexmet line of next-gen advanced high strength steels. It stated that the Nexmet family of items will offer greater ductility, high strength and improved formability solutions for different needs for structural and external automotive body light weighting applications. These goods are geared to support automotive OEMs in meeting 2025 U.S. CAFE targets.
The firm remains committed to offer competitive pricing in the existing operating environment. Price surged in the spot market for numerous steel items have been seen of late. The firm should also benefit from its cost-reduction initiatives in the coming period.
Despite all these developments, the steel industry is still entangled in tough times. The industry continues to roll under overcapacity. Also, the steel industry in the United States remains under the peril of cheaper imports regardless of some favorable advancements on the import aspect in the recent past in the form of heavy tariffs impositions on imports.
In last trading session, the stock price of AK Steel gained over 10% to close the trading session at $8.89. The gains came at a low share volume of 1,400 compared to average share volume of 23.49 million.