Steel Mills

Cliffs Posts Higher Q3 Profits, Solid Shipments Despite UAW Strike

Written by Laura Miller

October 23, 2023

Cleveland-Cliffs Inc.

Third quarter ended Sept. 3020232022% Change
Net sales$5,605$5,653-0.8%
Net income$264$15273.7%
Per diluted share$0.52$0.2979.3%
Nine months ended Sept. 30
Net sales$16,884$17,945-5.9%
Net income$554$1,549-64.2%
Per diluted share$1.08$2.95-63.4%
(in millions of dollars except per share)

Cleveland-Cliffs posted solid results for the third quarter, with strong steel shipments, particularly to the automotive industry, the steelmaker said in its Q3 earnings report on Monday, Oct. 23.

“Q3 2023 was our third consecutive quarter with steel shipments above 4 million tons,” commented Cliffs’ Chairman, President, and CEO Lourenco Goncalves, noting the company “achieved another record in automotive shipments.”

Cliffs shipped 4.1 million tons of steel products in Q3, down slightly from 4.2 million in Q2. Compared to the year-ago quarter, steel shipments were 13% higher.

The company’s Q3 product mix was 36% hot rolled, 30% coated, 14% cold rolled, 6% plate, 4% stainless and electrical steel, and 10% other, including slabs and rail.

Goncalves said the strength in shipments to automotive clients happened both before and after the United Auto Workers (UAW) strike that began on Sept. 15. Cliffs’ other major customers outside of Detroit picked up the slack, he said.

However, service center customers bought very low volumes throughout the quarter, he said, which “led to a higher value mix of shipments than expected and, consequently, better-than-expected realized prices.”

Cliffs’ average Q3 realized selling price was $1,203 per ton – just 4% lower than the $1,255 per ton achieved in the prior quarter.

All told, Cliffs’ Q3 net income jumped from $152 million last year to $264 million this year on revenues that were roughly flat at $5.61 billion vs. $5.65 billion.

Direct sales to the automotive market accounted for 36% of steelmaking revenues, the company said. Approximately 26% of sales went to infrastructure and manufacturing, 24% to the distributors and converters market, and 14% to steel producers.

“As we look to the future,
it should be clear to all of those who have followed us
that very exciting and transformational events are ahead.”

Lourenco Goncalves, Cleveland-Cliffs’ Chairman, President, and CEO

Looking forward, Goncalves said, “We expect that in Q4 we will see the end of the UAW strike and more normal buying patterns from service centers. That should support us not only in Q4, but into 2024 as well.”

“As we look to the future, it should be clear to all of those who have followed us that very exciting and transformational events are ahead,” he added.

Recall that Cliffs is among the bidders for U.S. Steel, which announced in August that it was exploring a sale.

Some market sources think an announcement about a deal could happen as soon as late October or early November. Other think that talk is premature.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.

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