Steel Mills
Cliffs Predicts Solid 2H on Strong Steel Shipments, Auto Demand
Written by Michael Cowden
July 24, 2023
Cleveland-Cliffs swung to a profit in the second quarter after losing money in the first.
The Cleveland-based steelmaker and iron ore miner predicted that the good times would continue to roll into the second half on what is said was continued strength in automotive demand.
“While the performance of our automotive clients continues to improve, the sector has not returned to pre-COVID levels yet, indicating that Cleveland-Cliffs still has plenty of value to be unlocked in the near future,” company chairman, president, and CEO Lourenco Goncalves said in a statement released with earnings figures on Monday, July 24.
All told, Cliffs posted second quarter net income of $347 million, down 42% from $596 million in Q2’22 on revenue that slipped 6% to $5.9 billion over the same period. The company, however, stressed that profits were up sharply from Q1’23 – when it lost $57 million.
It also touted steel sales volumes, which weighed in at 4.20 million tons in Q2’23, up 15% from 3.64 million tons in Q2’22. Of that amount, 35% was hot-rolled, 15% cold-rolled, 30% coated, 6% plate, 4% stainless and electrical, and 10% other products such as slabs and rail.
“Looking forward, we are on pace for our best shipment year since becoming a steel company,” Goncalves said.
Recall that Cliffs was primarily an iron ore miner and blast furnace pellet producer before the acquisition of steelmakers AK Steel and ArcelorMittal USA.
What’s more, Cliffs capital expenditures at present and in coming years “are well-known and low,” something that should set the company apart from some of its competitors, he said.
By Michael Cowden, michael@steelmarketupdate.com
Michael Cowden
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