AK Steel: A Steel Stock To Sell Despite Price Hikes

Scrap prices have increased marginally because scrap demand has increased and mills are trying to build up inventory before the winter season. However, overall steel demand remains depressed and we believe AK Steel (AKS) is facing a double-edged sword as costs increase and demand remains depressed. We maintain our sell rating on AKS.

AK Steel produces flat-rolled, tubular, stainless and electrical sheets as its primary operations, in the U.S. and internationally. Construction, automotive, power distribution and appliances, and industrial machinery and equipment serve as AKS' primary markets.

 We believe STLD is in a good position to benefit from a rebound in steel prices because of its high operating margins, diversified product mix, growth projects in the pipeline and vertical integration.

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