West Chester, Ohio-based AK Steel has announced it will fully shut down its integrated steelmaking complex in Ashland, Kentucky. According to its website, the 700-acre complex includes a blast furnace, a basic oxygen furnace (BOF) and galvanizing operations. The mill’s melting capacity, however, has been idle since late 2015, with only the galvanizing line running since then.
As part of its fourth quarter and year-end earnings announcement, the steelmaker indicated that “given the company’s strategy of focusing on value-added, more innovative and differentiated products, AK Steel plans to close the largely-idled Ashland Works facility by the end of 2019.”
Continues the firm, “More than three years ago, AK Steel idled most of the Ashland Works operations, including the blast furnace, but continued to operate a single hot dip galvanizing coating line with 230 employees. The company plans to increase its operating efficiency and lower its costs by completing the shutdown of the blast furnace and steelmaking operations within the next several months, and by working with its customers to transition products coated at Ashland Works to other AK Steel operations in the United States with available capacity before the end of this year.”
The move occurs despite other steelmakers, including Pittsburgh-based United States Steel Co. and several electric arc furnace (EAF) steelmakers, indicating they are increasing capacity in light of Trump administration executive orders and tariffs designed to bolster the American steel sector.
Regarding those policies, AK Steel comments that its actions in idling the Ashland plant, “combined with the positive impact of the [Trump] administration’s policies to address unfair trade practices, will help facilitate the company’s longer term growth plans.”
In terms of melt shop capacity, AK Steel continues to operate BOF mill complexes in Dearborn, Michigan, and Middletown, Ohio, and EAF mills in Mansfield, Ohio, and Butler, Pennsylvania.
For 2018, AK Steel reported net income of $186.0 million, an increase of 80 percent over net income of $103.5 million in 2017. The company’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for 2018 was $563.4 million, or 8.3 percent of net sales, compared to adjusted EBITDA of $528.5 million, or 8.7 percent of net sales in 2017. “Higher steel selling prices and shipments during 2018, particularly to the distributors and converters market, more than offset higher costs for certain raw materials and supplies, including graphite electrodes, compared to a year ago,” states the company.
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