Cliffs ships record amount of steel; sees scrap, HRC prices staying high

Cleveland-Cliffs Inc. shipped more than 4 million short tons (st) of steel in each quarter of 2023, pushing its full-year shipments to a record 16.4 million st.

The Cleveland-based steelmaker reported shipments of 4.039 million st in Q4’23. Although down 1.6% from the prior quarter, shipments improved 5.2% year over year (y/y), and Cliffs expects them to remain strong in 2024.

“Steel demand remained healthy throughout the entire year, with our most important market – the automotive sector – performing well,” said Cliffs’ chairman, president, and CEO Lourenco Goncalves in the company’s Q4’23 earnings report released on Monday, Jan. 29.

Goncalves said that demand from the automotive sector – its most important end market – was consistently strong, even with the United Auto Workers (UAW) strike that ended in late October.

“After it was clear that the strike was not creating any real issues in the marketplace, non-automotive clients de-stocking their inventories betting on lower steel prices were compelled to buy steel at higher prices,” he noted.

Cliffs’ average Q4’23 selling price of $1,093/st was 9.1% lower than the previous quarter and 5.4% lower y/y.

“Going forward, and assuming a fair scrap marketplace – free from artificial, provoked, and hard-to-explain moves – with scrap demand growing and scrap supply shrinking, there is no good reason for scrap prices to go down. If true supply and demand for scrap in the US prevails, there is no good reason for HRC prices to go below $1,000 per net ton,” Goncalves commented.

All told, Cliffs posted a Q4’23 net loss of $139 million on revenues of more than $5.1 billion. Sales were 1% higher y/y, and the quarterly loss improved from a net loss of $204 million in Q4’22.

For the full year 2023, Cliffs’ net income was $450 million on sales of just under $22 billion. Sales slipped 4% y/y while net income was down from $1.376 billion in 2022.

Goncalves ended the earnings release by stating that Cliffs’ “position as an American leader in the steel industry has never been stronger, and that is particularly relevant in turbulent periods for the world, like the one we are living through right now. Cleveland-Cliffs is proud of being American owned, American operated, and a reliable foundation of American values.”