LOCAL IMPACT
The upcoming maintenance outage at AK Steel’s Ashland Works blast furnace will not impact production at the Middletown Works blast furnace, according to AK Steel spokesman Mike Wallner.
“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.
Due to ongoing problems with AK Steel’s blast furnace at its steel plant in Ashland, Ky., the company said it will invest $17 million for repairs before the end of the year.
AK Steel's blast furnace in Ashland unexpectedly shut down twice this year due to some kind of malfunction or incident, according to company disclosures. It happened first in February, and again in July.
The blast furnace is the part of the mill where fuel, iron ore and limestone are heated and reduced to make hot metal. AK Steel has two blast furnaces — the one at Ashland, and one at Middletown Works in Butler County.
Other steel plants operated by AK Steel use electric arc furnaces, which consume scrap steel and heats it with an electrical charge to mold metal.
On Wednesday, AK Steel said the Ashland Works blast furnace has returned to operation since the most recent July shutdown, but it continues to run at below normal production rates. And to return the blast furnace to normal production levels and provide more reliable operations in the future, the steelmaker plans to move up a maintenance outage scheduled on the calendar for 2015, to 2014.
Beginning in October, the Ashland blast furnace will be shut down for approximately 28 days, and repairs will include a reline of the blast furnace hearth.
Fixes at Ashland Works are expected to negatively impact AK Steel’s production for the rest of the year and financial results.
It’s estimated that reduced production at Ashland will negatively impact AK Steel’s earnings by $25 million over the July to September quarter, and by an additional $29 million during the October through December quarter.
In the meantime, AK Steel will purchase merchant carbon slabs and increase production of carbon slabs at its Butler Works electric arc furnace in Pennsylvania to offset lower steel output from Kentucky. AK Steel said it could also rely on its plans to buy a Michigan steel plant, if the acquisition is completed in time, to help offset production levels.
Despite the costs associated with Ashland Works, AK Steel expects to report a profit for the third quarter ending September 30, according to the company. Boosting results are lower energy and material costs, and strong demand for steel from automotive customers.
On July 21, AK Steel announced plans to buy a new steel plant in Dearborn, Mich., which produces carbon flat-rolled steel products using a blast furnace. The $700 million deal is now expected to close by the end of September after receiving regulatory clearance, also according to the company's updates.
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.
Presently, AK Steel facilities in Ohio, Kentucky, Indiana, Pennsylvania and Minnesota employ more than 6,000 and produce flat-rolled carbon, electrical and stainless steels used by the automotive, appliance, construction and manufacturing markets.
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