Derivative Contracts

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Contracts

Derivative Contracts

We maintain a metal, natural gas and electricity pricing risk-management strategy that uses commodity derivative contracts to minimize significant, unanticipated gains or losses that may arise from volatility of the commodity indices.

By using derivative contracts to limit exposures to fluctuations in metal, natural gas and electricity prices, we are exposed to credit risk and market risk. Credit risk is the risk that the counterparty might fail to fulfill its performance obligations under the terms of the derivative contract. Market risk is the risk that the value of a derivative instrument might be adversely affected by a change in commodity price. We manage the market risk associated with derivative contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

We manage credit risk associated with derivative contracts by only executing derivative instruments with counterparties with investment-grade credit ratings. The amount of such credit risk is limited to the fair value of the derivative contract plus the unpaid portion of amounts due to the Company pursuant to terms of the derivative contracts, if any. If a downgrade in the credit rating of these counterparties occurs, management believes that this exposure is mitigated by provisions in the derivative arrangements which allow for the legal right of offset of any amounts due to the Company from the counterparties, if any, with any amounts payable to the counterparties by the Company.

The following tables provide a summary of our outstanding commodity derivative contracts:

(in millions, except for number of contracts)
	As of
	June 30, 2015			December 31, 2014			June 30, 2014
	Net Notional Amount		# of Contracts	Net Notional Amount		# of Contracts	Net Notional Amount		# of Contracts
Metal	$	13.3	585	$	13.4	400	$	12.6	421
Natural Gas	2.2		68	2.6		78	2.7		73
Electricity	2.5		35	5.9		77	2.7		38
Total	$	18.0	688	$	21.9	555	$	18.0	532

	As of
(in millions)	June 30, 2015			December 31, 2014			June 30, 2014
Notional Amount - Long	$	31.5		$	29.9		$	27.9
Notional Amount - Short	(13.5		)	(8.0		)	(9.9		)
Total	$	18.0		$	21.9		$	18.0

The fair values of derivative contracts in the consolidated balance sheets include the impact of netting derivative assets and liabilities when a legally enforceable master netting arrangement exists. The following tables summarize the gross amounts of open derivative contracts, the net amounts presented in the consolidated balance sheets, and the collateral deposited with counterparties:

(in millions)	As of June 30, 2015
	Gross Amounts of Recognized Assets		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Assets Presented in Consolidated Balance Sheet
Metal	$	1.4	$	(1.4	)	$	—
Natural gas	—		—			—
Electricity	—		—			—
Collateral on deposit	2.8		(1.1		)	1.7
Total	$	4.2	$	(2.5	)	$	1.7
Consolidated balance sheet location:
Prepaid expenses and other current assets						$	1.7
Total						$	1.7

(in millions)	As of June 30, 2015
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Liabilities Presented in Consolidated Balance Sheet
Metal	$	1.7	$	(1.7	)	$	—
Natural gas	0.4		(0.4		)	—
Electricity	0.4		(0.4		)	—
Total	$	2.5	$	(2.5	)	$	—

(in millions)	As of December 31, 2014
	Gross Amounts of Recognized Assets		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Assets Presented in Consolidated Balance Sheet
Metal	$	0.5	$	(0.5	)	$	—
Natural gas	—		—			—
Electricity	0.2		(0.2		)	—
Collateral on deposit	3.3		(2.0		)	1.3
Total	$	4.0	$	(2.7	)	$	1.3
Consolidated balance sheet location:
Prepaid expenses and other current assets						$	1.3
Total						$	1.3

(in millions)	As of December 31, 2014
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Liabilities Presented in Consolidated Balance Sheet
Metal	$	1.4	$	(1.4	)	$	—
Natural gas	0.7		(0.7		)	—
Electricity	0.6		(0.6		)	—
Total	$	2.7	$	(2.7	)	$	—

(in millions)	As of June 30, 2014
	Gross Amounts of Recognized Assets		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Assets Presented in Consolidated Balance Sheet
Metal	$	0.9	$	(0.8	)	$	0.1
Natural gas	0.1		—			0.1
Electricity	0.4		(0.1		)	0.3
Collateral on deposit	1.0		—			1.0
Total	$	2.4	$	(0.9	)	$	1.5
Consolidated balance sheet location:
Prepaid expenses and other current assets						$	1.5
Total						$	1.5

(in millions)	As of June 30, 2014
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Liabilities Presented in Consolidated Balance Sheet
Metal	$	0.8	$	(0.8	)	$	—
Natural gas	—		—			—
Electricity	0.1		(0.1		)	—
Total	$	0.9	$	(0.9	)	$	—

The following table summarizes the effects of derivative contracts in the consolidated statements of operations:

(in millions)	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Losses (gains) in cost of sales for:
Metal	$	0.4	$	(0.6	)	$	(0.1	)	$	(0.5	)
Natural gas	—		—			0.1			(0.2		)
Electricity	0.3		(0.2		)	0.3			(1.6		)
Total	$	0.7	$	(0.8	)	$	0.3		$	(2.3	)