AK Steel Holding Corp., the third-largest U.S. steelmaker, is closing a Kentucky coke plant to reduce costs by tapping cheaper sources of the fuel used to produce iron and steel.
The shutdown of the Ashland plant, which has 263 employees, will be completed early in next year’s second quarter, the West Chester, Ohio-based company said in a statement today. Most of the $80 million in pretax costs for the move will be taken this quarter, AK Steel said.
U.S. steelmakers are raising prices and bringing more production back on line as they recover from the plunge in demand following the 2008-2009 recession. The Ashland plant makes AK Steel’s highest-cost coke, which will be replaced with alternate sources of the blast-furnace fuel, the company said.
“The coke plant is no longer cost competitive due to increased maintenance and increasingly stringent environmental regulations,” AK Steel said in the statement.
The costs include about $50 million in non-cash expenses to write off the value of the property, plant and equipment, $18 million related to employment and $12 million for the closing, the company said.
AK Steel rose 6 cents to $16.49 at 12:01 p.m. in New York Stock Exchange composite trading. The shares declined 23 percent this year through yesterday.
Nucor Corp. and U.S. Steel Corp. were the biggest publicly traded steelmakers based in the U.S. by revenue last year.