Cleveland Cliffs Reports Strong Start to 'Good Year'

Cliffs recorded a 32 percent year-over-year increase in price realization of $105 per long ton due to higher hot-rolled steel pricing and its impact on pellet inventory. For the full year, USIO revenue realization is expected to be in the range of $102 to $107 per long ton.

Cleveland Cliffs announced it would close its Asia-Pacific iron ore segment in Australia by June 30. All mining activity at APIO ceased as of April 15 and plans are being made to divest assets. The last shipment of ore from APIO will be in June and the segment will be treated as a discontinued operation starting in the second quarter.

Goncalves expects 2018 to be a strong year for Cleveland Cliffs and the U.S. steel industry. “This year, consumption will be very high because [the U.S. steel] business is good. No matter what happens with Section 232, prices will continue to be high and demand will continue to be good. Service centers and others will be a lot more cautious on how much they are importing, where they are getting steel and how much they’re paying. So this year should be a good year for these two businesses in United States,” he said.

Goncalves expects the HBI project in the works in Toledo, Ohio, to be a major win for Cleveland Cliffs in the Great Lakes region. As blast furnaces are replaced by electric arc furnaces, Cliffs will be in a position to provide HBI to EAFs for production of high-value steels for the automotive industry. “The fact of the matter is that nobody can deny there is a push toward the EAFs going into high-end steels. They have the ability to do it. They have the balance sheet to do it. They have the support from their clients. What they don’t have now is quality feedstock. I’m providing that,” he said.