AK Steel Ups Specialty Sheet & Strip Stainless Steel Prices

AK Steel Holding Corporation (NYSE:AKS) declared that it will raise base prices for all specialty sheet and strip stainless steel products by 3%-6%. The price increase will be effective Jul 5, 2016.

Recently, AK Steel Holding’s subsidiary, successfully closed the registered offering of $380 million aggregate principal amount of 7.50% senior secured notes due 2023 (the New Notes) and the earlier announced tender offer of 8.750% senior secured notes due 2018 (the Old Notes).

The net proceeds of the secured notes offering were about $353.1 million and the company plans to utilize the net proceeds, along with cash on hand and/or borrowings under its revolving credit facility, to fund its cash tender offer for any and all of its outstanding 8.750% Senior Secured Notes due 2018 and redeem all remaining outstanding Old Notes on the Redemption Date.

AK Steel exited first-quarter 2016 with cash and cash equivalents of $113 million, up roughly 99.7% year over year. Changes in working capital prompted an increase in cash flows from operating activities, helping the company add $56.4 million to its cash balance in the quarter. Long-term debt remained relatively consistent year over year, at $2,336.4 million.

AK Steel remains affected by global overcapacity in steel as well as cheap products from China. However, the company aims to provide competitive pricing even in the current economic environment. Price increases in the spot market for various steel products have also been observed of late.

AK Steel currently has a Zacks Rank #3 (Hold).

Some better-ranked companies in the steel space include Ryerson Holding Corp. (NYSE:RYI) , ArcelorMittal (NYSE:MT) and Olympic Steel Inc. (NASDAQ:ZEUS) . While Ryerson Holding sports a Zacks Rank #1 (Strong Buy), ArcelorMittal and Olympic Steel carry a Zacks Rank #2 (Buy).