Butler County steelmaker AK Steel announced Friday plans to temporarily idle some operations of its Ashland Works steel mill in Kentucky due to unfair trade concerns.
The blast furnace and related steelmaking operations at the facility will shut down in December, but AK Steel said it does not intend to idle everything. The hot-dip galvanizing line that primarily serves automotive customers will keep running, according to AK Steel.
AK Steel has enough steelmaking capacity at its other blast furnaces in Middletown and Dearborn, Mich., to meet customer requirements and does not expect any interruptions in shipments to its customers, according to the company.
“We are taking this necessary step due to the onslaught of what we believe are unfairly traded imports of carbon steel that have been flooding our shores. These imports have substantially reduced order intake rates, production rates, shipment volumes and selling prices,” said James Wainscott, chairman, president and chief executive officer of AK Steel, in a written statement.
“We will continue to closely monitor market conditions and run our overall operations as efficiently as possible to continue to meet our customers’ needs,” Wainscott said.
If market conditions do not improve, the idling of the affected portions of the facility are set to begin in mid-December of 2015 and could last more than six months, company officials say.
AK Steel spokeswoman Lisa Jester did not comment about the impact on Middletown Works or what triggers could cause AK to restart operations at Ashland once they stop.
Ashland Works employs a total about 940 workers, but Jester said in an email the number of jobs to be affected at Ashland has not yet been determined.
However, when the Ashland blast furnace was shut down last year for repairs due to ongoing problems, then AK Steel spokesman Mike Wallner told Journal-News it would not impact production at Middletown.
“It’s important to note that all of the carbon steel slabs produced at our Ashland Works get rolled at Middletown Works. While our Ashland Works blast furnace is down, we will utilize the hot mill at Middletown Works to roll additional carbon steel slabs that we purchase on the open market — just as if they were coming from Ashland,” Wallner said at the time, in Sept. 2014.
The blast furnace is the part of the mill where fuel, iron ore and limestone are heated and reduced to make hot metal.
Fortune 500 company AK Steel has joined three international trade cases this year. Earnings have suffered in 2015 due to lower selling prices, which the company blames partly on rising imports that are artificially low priced. During the first half of this year, the company reported a net loss of $370 million, compared to $103.2 million in 2014.
A lower price of $965 per ton on average for the first six months of 2015 compared to $1,096 in 2014 has also hurt results.
Results for the July to September quarter will be released Oct. 27.
The manufacturer announced July 28 petitions against eight countries related to cold-rolled steel, used to make appliances, automotive products, containers and construction materials.
In June, AK Steel filed complaints in partnership with other steel producers related to corrosion-resistant steel.
The newest petition made in August charges that unfairly-traded imports of certain hot-rolled steel flat products are causing material injury to the domestic industry. Producers from seven countries are being accused of selling hot-rolled steel in the U.S. market at less than fair value. The petition also alleged that the foreign producers benefit from subsidies provided by their governments.
Hot-rolled steel — primarily used in appliances, automotive products, heavy machinery, machine parts, nonresidential construction and transportation equipment — comprised over 15 percent of AK Steel’s shipments in 2014.
One of the Cincinnati-Dayton region’s largest publicly-held companies, West Chester Twp.-based AK Steel employs approximately 2,400 full-time workers in Butler County between headquarter operations and the Middletown Works steel plant, the company’s largest steel plant.
Altogether, AK Steel operates eight steel plants including the Ashland site and Middletown Works. Other steel plants use electric arc furnaces, which consume scrap steel and heat it with an electrical charge to mold metal. Presently, facilities in Ohio, Kentucky, Indiana, Pennsylvania, Michigan and West Virginia employ more than 8,000 altogether and produce flat-rolled carbon, electrical and stainless steels used by the automotive, appliance, construction and manufacturing markets.