AK Steel says it does not expect the revised energy efficiency standards proposed by the U.S. Department of Energy (DOE) on February 1, 2012 to significantly impact the overall competitiveness of the company's grain-oriented electrical steels ("GOES") used in the manufacture of electrical distribution transformers. The company noted that with respect to some types of distribution transformers, the new standards have the potential for increasing the market for GOES.
"We are pleased with the Department of Energy's proposed efficiency standards," said James L. Wainscott, Chairman, President and CEO of AK Steel. "We continue to believe that AK Steel is well-positioned to meet the needs of our power generation and distribution customers for years to come."
AK Steel previously noted in a filing with the U.S. Securities and Exchange Commission that a potential risk factor for its GOES business was that the DOE might change efficiency standards in such a way that could substantially reduce the competiveness of electrical steel in such applications.
The revised efficiency standards as proposed by DOE would become effective in 2016. In the interim, AK Steel said that it will engage in research and development efforts to minimize any impact that the new standards might have on the available market for its GOES products.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. The company employs about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pa.; Ashland, Ky.; Rockport, Ind.; and its corporate headquarters in West Chester, Ohio
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs about 300 men and women in plants in Walbridge, Ohio, and Columbus, Ind. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets.
AK Coal Resources, Inc., another wholly-owned subsidiary of AK Steel, owns or leases metallurgical coal reserves in Somerset County, Pa. AK Steel also owns 49.9% of Magnetation LLC, a joint venture headquartered in Grand Rapids, Minn., that produces iron ore concentrate from previously mined ore reserves.