West Chester, Ohio-based flat rolled steelmaker AK Steel announced Tuesday that it expects to incur a net loss of between $0.67 and $0.72 per diluted share of common stock for Q4 2012. In Q3, AK Steel's net loss was $60.9 million, or $0.55 per diluted share of common stock.
AK Steel said it now expects shipments of approximately 1,375,000 to 1,400,000 tons in Q4, compared to shipments of 1,363,500 tons in Q3 2012. The company said it expects that its average selling price for all products for Q4 will decline by approximately 5 percent from its average selling price of $1,073 per ton for Q3. This reduction in average selling price is largely the result of two factors: lower average spot market prices for carbon steel products compared to Q3, due primarily to a decline in global economic and business conditions; and reduced raw material surcharges, due to lower raw material costs.
AK Steel said that it also has begun to experience lower costs for raw materials, but it does not expect the lower average selling prices it projects for Q4 will be fully offset by reduced raw material costs, principally due to the lag between the time period used to determine the price of certain key raw materials, in particular iron ore, and when those raw materials are actually purchased.
Similar to the pattern of the last couple of years, the company has seen a strong increase in its order book in the month of October compared to the preceding September. AK Steel has also seen an increase in pricing for carbon flat rolled steel products. These carbon steel price increases were driven in large part by increases in carbon scrap prices in both October and November. The company cautioned, however that the majority of the benefits associated with these price increases will not be realized until Q1 2013, principally because a significant portion of the carbon steel products it will ship in Q4 was sold prior to the price increases and because of a lag between when a price increase occurs and the time it takes for purchased product to work its way through inventory to being shipped.