Flood of Imports Depresses Market Conditions and Impacts Operations
West Chester, OH / CRWEPRESSRELEASE / October 16, 2015 - AK Steel (NYSE: AKS) today issued a notice under the Worker Adjustment and Retraining Notification (WARN) Act to hourly and salaried employees at its Ashland, Kentucky Works that it intends to temporarily idle the blast furnace and related steelmaking operations at the facility as a result of challenging domestic market conditions. AK Steel said it does not intend to idle the hot-dip galvanizing line at Ashland Works that primarily services automotive customers.
AK Steel said it has appropriate steelmaking capacity at its other plants to meet customer requirements and does not expect any interruptions in shipments to its customers.
“We are taking this necessary step due to the onslaught of what we believe are unfairly traded imports of carbon steel that have been flooding our shores. These imports have substantially reduced order intake rates, production rates, shipment volumes and selling prices,” said James L. Wainscott, Chairman, President and CEO of AK Steel. “We will continue to closely monitor market conditions and run our overall operations as efficiently as possible to continue to meet our customers’ needs.”
AK Steel, along with other domestic steel companies, has filed anti-dumping and counter-vailing duty trade cases with the International Trade Commission with respect to coated, cold-rolled and hot-rolled carbon steel products in an attempt to combat these foreign imports.
The WARN notice begins a 60-day period that must be given prior to idling operations and laying-off employees under the WARN Act. If market conditions do not improve, it is expected that the idling of the affected portions of the facility will begin in mid-December of 2015 and could last more than six months.
Ashland Works produces carbon steel slabs, along with hot dip galvanized and galvannealed coated steels. The plant employs approximately 940 men and women.
AK Steel is a world leader in the production of flat-rolled carbon, stainless and electrical steel products, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. Headquartered in West Chester, Ohio (Greater Cincinnati), the company employs approximately 8,000 men and women at eight steel plants, two coke plants and two tube manufacturing plants across six states: Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia. Additional information about AK Steel is available at www.aksteel.com.
Safe Harbor Statement
The statements in this release reflect management’s estimates and beliefs and are intended to be, and hereby are identified as “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “believes,” “intends,” “plans,” “estimates” and other similar references to future periods typically identify such forward-looking statements
These forward-looking statements reflect the current belief and judgment of the company’s management, but are not guarantees of future performance or outcomes. They are based on a number of assumptions and estimates that are inherently subject to economic, competitive, regulatory, and operational risks, uncertainties and contingencies that are beyond the company’s control, and upon assumptions with respect to future business decisions and conditions that are subject to change.
Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that actual events or performance will differ materially from such predictions as a result of certain risk factors, including different or lesser-than-expected impacts as a result of the pending and anticipated future carbon steel trade case filings, including impacts on the volume of foreign carbon steel imports, domestic steel shipments and selling prices, or AK Steel’s shipment levels, carbon steel spot market prices, production levels or per ton operating costs; reduced selling prices, shipments and profits associated with a highly competitive industry with excess capacity; changes in the cost of raw materials and energy; the company’s significant amount of debt and other obligations; severe financial hardship or bankruptcy of one or more of the company’s major customers; reduced demand in key product markets due to competition from aluminum or other alternatives to steel; increased global steel production and imports; excess inventory of raw materials; supply chain disruptions or poor quality of raw materials; production disruption or reduced production levels; the company’s healthcare and pension obligations and related laws and regulations; not timely reaching new labor agreements; major litigation, arbitrations, environmental issues and other contingencies; regulatory compliance and changes; climate change and greenhouse gas emission limitations; conditions in the financial, credit, capital or banking markets; the company’s use of derivative contracts to hedge commodity pricing volatility; ongoing challenges faced by Magnetation; inability to fully realize benefits of long-term cost savings initiatives; inability to hire or retain skilled labor and experienced manufacturing and mining managers; information technology security threats and cybercrime; adverse effects on the company’s operations and/or financial results related to Magnetation’s bankruptcy; failure to achieve the estimated synergies and other expected benefits of the acquisition of Severstal Dearborn, LLC and/or to integrate it successfully; as well as those risks and uncertainties discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2014, as updated in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. As such, readers are cautioned not to place undue reliance on forward-looking statements, which speak only to management’s plans, assumptions and expectations as of the date hereof. The company disclaims any duty to update or alter any forward-looking statements, except as required by applicable law.
Lisa H. Jester
Corporate Manager, Communications and Public Relations
Investor and Analyst Contacts
Roger K. Newport
Executive Vice President, Finance and Chief Financial Officer
David E. Westcott
Douglas O. Mitterholzer
General Manager, Investor Relations and Assistant Treasurer
Source: AK Steel