AK Steel’s 2Q15 Shipments Rose on Strong Automotive Demand



AK Steel’s 2Q15 shipments

AK Steel’s (AKS) share price rose by more than 15% on July 28 after it released its 2Q15 earnings. Prices of all major steel companies including US Steel (X), Nucor (NUE), and ArcelorMittal (MT) rose sharply on July 28. US steel companies have filed an anti-dumping case against the import of cold rolled steel products from several countries like China and South Korea (EWY).

Cold rolled steel is a major steel type and is used in industries ranging from automobiles to electrical appliances. US steel companies have been negatively hit by a tsunami of imported steel products. We’ll explore this trend further as we review AK Steel’s 2Q15 earnings.

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AK Steel’s 2Q15 shipments increased

The previous chart shows a snapshot of AK Steel’s 2Q15 earnings. As you can see, its shipments increased 3% in 2Q15 as compared to the previous quarter. Strong demand from the automobile sector, AK Steel’s largest customer segment, boosted its 2Q15 shipments. To add to that, AK Steel made more shipments in the spot market.

Lower steel prices

Spot steel prices have corrected steeply over the last nine months. Higher spot shipments reduced the average realized steel prices for AK Steel. Steel prices dropped in some of AK Steel’s annual contracts as well, where it has a variable pricing mechanism. As a result of lower realized steel prices, AK Steel’s revenues declined as compared to 1Q15.

However, raw material costs have also come down over the last few months. In the next article, we’ll discuss how lower input costs impacted AK Steel’s 2Q15 earnings.


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