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

Cleveland-Cliffs is negotiating contracts at substantially higher prices with diverse clients in anticipation of demand remaining strong through the rest of the year.


Lourenco Goncalves, chairman, president, and chief executive officer, noted the benefits of the internal use of HBI to reduce reliance on scrap prices and higher contract prices in late 2021 and into 2022. The company plans to move toward zero net debt by 2022.


In H1 2021, Cliffs’ external steel product volumes were 8.3mn nt in H1 2021 vastly improved from 811,000nt in the same period last year, due to Cliffs’ acquisitions of ArcelorMittal’s assets earlier this year and AK Steel in 2020.


The company’s steelmaking revenue in H1 2021 rose to $8.8bn from $1.4bn in the same period last year.


Sales rise in Q2

Cliffs’ sales in Q2 2021 tallied at 4.2mn nt up from 614,000nt in Q2 2020. During the quarter under review 33pc of the steel product volumes came from hot-rolled coil, 30pc from coated flat, 17pc from cold-rolled coil, 6pc from plate, 4pc from stainless and electrical, and 10pc from slabs and rail.


The company’s Q2 consolidated revenue increased five-fold to $4.9bn against $1.1bn a year ago, while net income was reported at $795mn as opposed to a loss of $108mn loss in the same period. 


Steelmaking revenue during the quarter comprised of 40pc or $2bn to distributors, 27pc or $1.3bn to infrastructure and manufacturing, 23pc or $1.1bn to automotive, and 10pc or $0.5bn to steel producers. 


The cost of goods sold made up 75.7pc of total revenue in Q2 2021 but 112pc in the same quarter of the prior year. Adjusted EBITDA from steelmaking was $1.4bn in Q2 2021 in contrast to a loss of $54mn in the prior-year quarter. The average net selling price of finished steel products increased by 7.3pc to $1,118/nt in Q2 2021 in comparison to Q2 2020.

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