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Can AK Steel’s Second-Quarter Earnings Call Reassure Investors?

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Dec. 4 2020, Updated 10:52 a.m. ET

Second-quarter earnings call

Previously in this series, we saw what analysts are projecting for AK Steel’s (AKS) second-quarter earnings. In this part, we’ll look at key updates the markets may watch in AK Steel’s earnings call.

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Average selling price guidance

During AK Steel’s second-quarter earnings call, analysts could be closely watching the company’s ASP (average selling price) guidance. Over the last couple of quarters, its ASP growth has lagged other steel companies, including Steel Dynamics (STLD), Nucor (NUE), and ArcelorMittal (MT).

AK Steel has recently seen selling sprees after its earnings releases. Lower-than-expected ASP guidance amid rising steel prices has made investors wary of AK Steel’s outlook. You can read Steel Companies’ 1Q18 Report Card: Gains and Losses to see how AK Steel’s ASP stacks up against other steel producers.

The markets might also watch AK Steel’s commentary on automotive contracts. The company ships almost two-thirds of its steel to automotive companies.

Ashland Works

AK Steel idled its Ashland Works plant in response to falling steel prices in 2015. Spot steel prices have more than doubled since the time AK Steel idled the plant. Spot HRC (hot-rolled coil) prices are currently at their highest level since 2008. While AK Steel has previously stated that it continues to monitor the plant, the markets could look for cues on a possible decision on the idled plant. U.S. Steel Corporation (X) has already taken the lead and announced the restart of two blast furnaces at its Granite City facility.

In the next and final part of this series, we’ll see how analysts see AK Steel prior to its earnings release.

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