Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Flat-rolled steel producer Cleveland-Cliffs projects steel shipments to reach about 4mn nt (3.63mn mt) in Q1 2021, including a full quarter of Cliffs’ steel sales.


It foresees significant Q1 adjusted EBITDA improvement compared to Q4 2020 and expects profitability to grow further in the second quarter resulting from beginning HBI sales to outside consumers, the company indicated.


Cliffs expects the current, favorable market conditions to continue and indicated that the gradually improved impacts from pricing mechanisms that have fallen behind, were common in steel sales. 


Company sources noted that the current operations have placed an added focus on the Burns Harbor hot strip mill (HSM) recently by adding resources and staffing to get HSM production and reliability increased.


Capital expenditures are expected to stay in the range of $600-650mn in 2021 including investment of around $500mn and $60mn for Toledo run-out expenses, with the balance slated for small development plans at Cleveland Works, Burns Harbor Works, and Precision Partners.


Cliffs also mentioned it made environmental commitments through a solid plan to achieve 25pc less greenhouse gas emissions by 2030. 


The company’s steel products sales volume tallied at 3.78mn nt in 2020, without prior-year steel product data to compare and including Cliffs’ results from Dec 9-31. The average net selling price of steel products was $947/nt in 2020 and $880/nt in Q4 2020.


Cliffs also noted its Q4 2020 steelmaking revenue of $2.1bn was comprised of $859mn, 41pc of automotive sales; $503mn, 24pc of outside pellet, slabs, and freight together with sales to steel producers; $374mn, 18pc of distributors and converters market sales; and $363mn, 17pc of infrastructure and manufacturing sales.


The company recorded a net loss of $81mn in 2020 including $186mn in amortization of inventory step-up and severance costs related to the ArcelorMittal acquisition, compared to a net income of $293mn in 2019. Consolidated revenue was $5.35bn in 2020, substantially above $1.99bn in revenue from the prior year. However, adjusted EBITDA was $353mn in 2020, markedly down compared to $525mn in 2019. 

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