Total net income for the first half of the year was $41.8 million, according to AK Steel.
“As you look at developing countries, one of the key drivers of economic activity is electricity ... so that’s why, especially in emerging countries and those which are rebuilding infrastructure, the markets for electrical steels is important to us,” said Alan McCoy, AK Steel spokesman.
AK Steel mostly sells electrical steels throughout Europe, South America and Asia for power generation and distribution markets, McCoy said. In addition to steel exports, AK Steel has several sales offices in Europe and has contracts with local producers to make steel products to AK Steel’s specifications, which is included in the company’s international sales count, he said.
He said foreign markets are strong for AK Steel’s electrical steels because it has special expertise and the local steelmaker is one of a handful of companies worldwide that make it. It is mostly made at Butler Works in Pennsylvania, he said. Electrical steel can typically be the core metal found inside a distribution transformer, for example, to help distribute power from a telephone pole down the street to a house.
Steel exports have doubled from just over 6 million tons in 2001 to over 12 million tons last year and are expected to reach 13 million tons this year, according to Nancy Gravatt, spokeswoman for American Iron and Steel Institute. Exports are also increasing because as the value of the U.S. dollar weakened this year, it made U.S. manufactured goods cheaper and more attractive to other countries, according to Gravatt.
West Chester Twp.-based AK Steel also makes carbon and stainless steel. Middletown Works, which has approximately 2,100 employees, makes carbon steel and processes some grades of stainless steel. The largest market for carbon steel has historically been the automotive market within a 500 mile radius of Middletown, said McCoy.
AK Steel doesn’t have a steel mill overseas, but the idea has made the drawing board.
“We have thought about virtually every way to improve our business,” McCoy said. “It is not easy and it’s getting more difficult to manufacture things in the U.S., especially the regulatory environment is increasingly difficult. The availability and price for energy and the reliability is increasingly difficult. So have we brainstormed, yes we have. What we want to do is make things in America.”
Facing rising raw materials costs, AK Steel can’t find sufficient quantities of its main ingredients of iron ore, water and energy.
McCoy added, “Our facilities are where they are largely because of decisions made 111 years ago. But the consequence today is because it’s a global market and raw materials are global commodities, we’re becoming severely disadvantaged.”
Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.
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