The newest powerhouse in the U.S. steel industry, Cleveland-Cliffs, expects a stellar fourth quarter due to the 2020 acquisitions of AK Steel and ArcelorMittal USA. Preliminary results for the company (including the period Dec. 9 through Dec. 31 for ArcelorMittal) show steel sales of 1.9 million tons and consolidated revenue of $2.2 billion to $2.3 billion. The addition of the two steel companies to the iron ore producer’s portfolio resulted in a 320 percent increase in revenue from Q4 2019.
Cleveland-Cliffs’ expects its EBITDA to be at a six-year high of $280 million to $290 million–a 150 percent increase over Q4 2019, with EBITDA margins of 12-13 percent.
Cleveland-Cliffs began operations in November at its HBI plant in Toledo, Ohio. Shipments of hot-briquetted iron to third-party customers are expected to commence in the first quarter of 2021 with full production reached by the second quarter.
“We ended 2020 on a particularly high note,” commented Cliffs’ Chairman, President and CEO Lourenco Goncalves. “With the completion of our second transformational acquisition creating the largest flat-rolled steel producer in North America and the start-up of the most modern and environmentally friendly Direct Reduction plant in the world, Cliffs enters 2021 with the right size, the right product mix, and the right customer mix for the business environment in which we operate.
“Our fourth-quarter strong results are just a sample of what we should be able to accomplish in 2021, when the contributions of the recent acquisition of ArcelorMittal USA and the sales of HBI to third-party customers will be fully reflected in the numbers. With the backdrop of a resilient steel pricing environment and the growing number of steel companies competing for an increasingly scarce scrap supply in 2021 and beyond, Cleveland-Cliffs will continue to benefit from our differentiated business model with self-sufficiency in pellets and HBI.”
Full financial results for the fourth quarter will be released on Feb. 25, 2021.
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