AK Steel said early Tuesday that it now expects an operating loss of $75-80 million for the second quarter, mainly due to the auto sector turndown.
The new estimate is higher than the $50 million operating loss originally forecast by AK, which said Q2 shipments are now expected to be approximately 725,000 mt rather than the 800,000 previously estimated. Average selling prices are expected to be down 3%-4% from Q1 levels.
The company explained the new guidance is due mainly to General Motors' decision to idle more than half its North American plants and Chrysler's bankruptcy filing and subsequent idling of its plants. "These actions by GM and Chrysler likely will reduce AK Steel's direct shipments to these customers, as well as shipments to other AK Steel customers who likewise supply the automakers," the company said in a statement. –Platts
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