AK Steel Forecasts Operating Loss in Third Quarter on Iron-Ore Price Gain
AK Steel Holding Corp., the third- largest U.S. steelmaker by 2009 sales, revised its third-quarter forecast to an operating loss because of sooner-than-planned maintenance and increasing iron-ore prices.
The operating loss will be about $20 a ton after the company closes its Ashland, Kentucky, blast furnace for 11 days starting Sept. 20, West Chester, Ohio-based AK Steel said today in a statement. The company forecast in July a third-quarter operating profit of about $15 a ton.
AK Steel fell 83 cents, or 5.7 percent, to $13.70 at 4:15 p.m. in New York Stock Exchange composite trading, the biggest decline in the Standard & Poor’s 500 Index. The shares have declined 36 percent this year.
The price of iron ore, a main ingredient in steelmaking, may increase more than expected from the 2009 benchmark price, the company said. The price gain will “likely” be more than the 65 percent advance the company forecast in the second quarter, AK Steel said.
Every five percentage points of variation from AK Steel’s original estimate of the change in iron-ore prices will affect third-quarter results by about $11 million, or $7 a ton, the company said.
Nucor Corp. and U.S. Steel Corp. were the biggest publicly traded steelmakers based in the U.S. by revenue last year.