Steel Mills

Cleveland-Cliffs posts Q1 loss on Weirton tinplate idling

Written by Michael Cowden

First quarter ended March 3120242023% Change
Net sales$5,199$5,295-1.8%
Net earnings (loss)($67)($57)-17.5%
Per diluted share($0.14)($0.11)-27.3%
In millions, except per share amounts

Cleveland-Cliffs Inc. continued to lose money in the first quarter, with the steelmaker blaming the loss in part on the idling of its tinplate facility in Weirton, W.Va.

The numbers

The Cleveland-based steelmaker on Monday posted a net loss of $67 million in the first quarter of 2024. That’s more than the $57 million it lost in Q1’23 on revenue that slipped 1.8% to $5.2 billion over the same period.

Cliffs said the Weirton idling, as well as debt repayments, cost it $202 million in Q1’24. The Q1 result was nonetheless better than the $155-million loss the company recorded in Q4’23.

“Our first quarter results were highlighted by the resiliency of automotive production in the United States, which helped to offset a temporary buyers strike from service centers in January and February,” Cliffs Chairman, President, and CEO Lourenco Goncalves said in a statement.

All told, Cliffs sold 3.94 million short tons (st) of steel in Q1’24, down 3.7% from 4.09 million st in Q1’23. But the company said it remained on track to ship 16.5 million st for the balance of the year.

Cliffs recorded average selling prices of $1,175/st in Q1’24, up 4.2% from $1,128/st in Q1’23. “With more automotive and less service center business, first quarter mix was richer than originally anticipated,” Goncalves said.

The company in addition repurchased 30.4 million of its own shares in Q1 as part of a $1-billion share repurchase program.

The beef

“Buying our own stock is clearly a better use of capital than any M&A opportunities at current valuations — so that’s our primary focus,” Goncalves said. He also gave a shoutout to Cliffs’ “remarkable partnership with our workforce.”

Those comments appeared to be thinly veiled references to Tokyo-based Nippon Steel’s nearly $15 billion bid to acquire U.S. Steel.

Cliffs, which was among the bidders for U.S. Steel, has become a vocal opponent of the deal. The United Steelworkers (USW) union, which represents workers at both Cliffs and the Pittsburgh-based steelmaker, has also sought to stop the acquisition.

Those voices have carried weight in a presidential election year. President Joe Biden said that U.S. Steel should remain under American ownership in a speech last week in Pittsburgh. And former President Donald Trump has also vowed to block the deal.

The pledges by the leading presidential contenders have come despite the concerns of automakers that further consolidation of the steel industry could hurt their businesses.

Michael Cowden

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