Why AK Steel Expects Its 1Q18 Shipments to Be Flat
In this article, we’ll see what leading steel companies had to say about their shipment guidance. Jaime Vasquez, AK Steel’s (AKS) CFO, said during the company’s 4Q17 earnings call, “We estimate that our first quarter flat-rolled steel shipments will be marginally higher compared to the fourth quarter of 2017.” While the company expects a 15% sequential increase in its automotive shipments, it expects its shipments in distributor markets to fall in 1Q18 as a result of an outage at its Middletown Works plant.
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Among other steel companies, U.S. Steel Corporation (X) expects its 2018 flat-rolled steel shipments to be flat compared to 2017 at ~10 million tons. Nucor (NUE), the largest US-based steel producer, pointed to “significant optimism in steel end use markets.”
End use demand
Steel Dynamics didn’t give volume guidance but pointed to strong demand in the US market. Mark Millett, Steel Dynamics’ CEO, said during the company’s 4Q17 earnings release, “We remain confident that current and anticipated macroeconomic and market conditions are in place to benefit domestic steel consumption in 2018.” Millett also added, “We believe North American automotive steel consumption will be steady, and we continue to gain momentum in that sector. We also believe that there will be continued additional growth in the construction and energy sectors. We believe the recent tax reform will also provide a stimulus for additional domestic fixed asset investment and growth.”
In the next part of this series, we’ll do a comparative analysis of steel companies’ 4Q17 average selling prices.