By Lisa Beilfuss
AK Steel warned Thursday that it would swing to a loss in its
first quarter, due to unexpectedly high levels of steel
imports.
Shares in the company, down nearly 30% this year, fell 7.6% to
$3.88 in recent after-hours trading.
The West Chester, Ohio-based steel producer expects a 14%
sequential drop in shipments. "Excess global steel making capacity
and continued challenging global economic conditions have resulted
in a substantial increase in the level of steel imports into the
United States," exacerbated by a stronger U.S. dollar, the company
said. So far this year, AK Steel added, imports of flat rolled
carbon steel products have risen nearly 60% and affected the
company's shipments and pricing power.
The downbeat forecast comes on the heels of news from fellow
steelmaker Nucor Corp's, which earlier Thursday slashed its own
first quarter guidance. Nucor similarly cited lower selling prices
due to higher imports.
As The Wall Street Journal reported earlier this week, U.S.
steel producers are starting to seek political support for trade
action as China floods the world with steel exports. Chief
executives of American steel companies will testify later this
month at a Congressional Steel Caucus hearing, a move that trade
lawyers said is a prelude to launching at least one anti-dumping
complaint with the International Trade Commission. The European
Union, for its part, has six investigations that might lead to
tariffs.
For the three months ending March 31, AK Steel expects to book a
loss of 23 cents to 28 cents a share. Analysts, according to
Thomson Reuters, have predicted a profit of a penny a share. A year
ago, the company reported a wider loss of 40 cents a share.
Lower raw material and energy costs helped to partially offset
the lower shipment volume and selling price declines, the company
noted.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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