AK Steel Holding Corporation AKS is planning to produce the first commercially available Next-Generation Advanced High-Strength Steels globally. The company feels that the new technology will facilitate the production of steel with improved formability at higher extreme tensile strength levels, thereby offering automakers with greater flexibility to lightweight their vehicles.
The project worth $29 million involves the use of new process technology to transform the current Hot Dip Galvanizing Line (“HDGL”) at AK Steel's Dearborn Works facility to manufacture both coated and cold-rolled Next-Generation Advanced High-Strength Steels on the same line. The modification of the HDGL is anticipated to be completed by the beginning of 2016, with new products to be shipped from early 2017.
AK Steel is striving to deliver high-quality products to its customers that are in line with the Corporate Average Fuel Economy (“CAFE”) standards. Moreover, Dearborn Works, which was commissioned in 2011, was chosen for this project as it allows convenient modifications for the manufacture of next-generation advanced steel due to its current galvanizing line and advanced technology. The modifications enable AK Steel to produce high-quality steel at lower costs compared with an entirely new production line.
AK Steel closed its acquisition of Severstal Dearborn, LLC in Sep 2014. The acquisition has positioned AK Steel as a premier North American steel manufacturer, helping the company to better serve its customers with enlarged scale and capacity.
Moreover, AK Steel intends to build a new, top-class Research and Innovation Center in Middletown, OH, at an estimated cost of $36 million. This new facility will be responsible for bringing new products to the marketplace, including new Stainless Steels, High Efficiency Electrical Steels, as well as Next-Generation Advanced High-Strength Steels, once it comes online in late 2016.
AK Steel currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the steel space include Olympic Steel Inc. ZEUS, Evraz Highveld Steel & Vanadium Ltd. HGVLY and POSCO PKX. While Olympic Steel sports a Zacks Rank #1 (Strong Buy), both Evraz Highveld Steel & Vanadium and POSCO carry a Zacks Rank #2 (Buy).
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