AK Steel Holding Corporation AKS announced that it will raise base prices for all of its stainless steel products. The price increase, along with shipments, will be effective from Jan 1, 2016.
The hike will be achieved through a reduction in the functional discount of four percentage points for commodity sheet and strip, specialty sheet and strip, and pipe and tube sheet and strip products. For the remaining stainless steel products, including automotive sheet and strip, base prices will be raised by $40 per ton.
AK Steel’s shares rose around 4.7% to close at $2.44 yesterday.
Recently, AK Steel declared that it is increasing the current spot market base prices for all carbon flat-rolled steel products, effective immediately with new orders. The minimum base price for hot rolled products will be $420 per ton. It will be $540 per ton for cold rolled products, and $550 per ton for hot dipped galvanized products.
AK Steel, in Oct 2015, announced its plans to temporarily idle the blast furnace and related steelmaking operations at its Ashland, Kentucky Works plant due to challenging market conditions, stemming from a deluge of imports of steel products. The plant, which employs roughly 940 people, makes carbon steel slabs, along with hot dip galvanized and galvannealed coated steels.
AK Steel has notified the hourly and salaried employees at the facility about the work suspension. The idling of the affected parts of the plant will start in mid December and could last more than six months, if the market conditions do not improve. The company expects to record charges for unemployment benefits and other costs to idle operations in the fourth quarter.
AK Steel currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials sector include Grupo Simec S.A.B. de C.V. SIM, Worthington Industries, Inc. WOR and Taseko Mines Ltd. TGB. All these stocks carry a Zacks Rank #2 (Buy).
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