Feb. 25--WEST CHESTER TWP. -- While AK Steel Corp. officials said the company expects a "significant loss" this financial quarter, they are projecting a turnaround in the second quarter.

The local steelmaker is projecting a "modest operating profit" in the second quarter as steel shipments begin to rebound, according to an annual filing with the U.S. Securities and Exchange Commission.

Part of the projected loss comes from the 45-day shutdown of the Middletown Works blast furnace, set to begin in early March.

Jim Wainscott, president, chairman and CEO of AK, said he expects the maintenance as well as the replacement of the furnace hearth to cost " in tens of millions." In the SEC filing, the company projects first quarter shipments between 850,000 and 900,000 tons, down from 1.1 million tons in the fourth quarter 2008.

AK also likely will forgo a purchase option on its West Chester Twp. headquarters building, which it relocated to in 2007. The company had the option of purchasing the 136,000-square-foot building at 9227 Centre Pointe Drive this year. Spokesman Alan McCoy indicated in January when the company announced salary layoffs in addition to hourly cuts that it was considering all cost-cutting measures, including foregoing purchase of the building.

AK has a 12-year lease with 10 years of optional extensions. Officials are assessing options for use of its former headquarters building in Middletown.

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