DewDiligence
3 weeks ago
CLF reports 4Q24 results:
https://www.clevelandcliffs.com/investors/news-events/press-releases/detail/670/cleveland-cliffs-reports-full-year-and-fourth-quarter-2024
The 3Q24 results are anticlimactic insofar as CLF pre-announced “trough” (not a typo) 4Q24 financials on 2/3/25 (#msg-175752565). Of greater consequence is the following remark from the CEO in the above PR: “As of late February, Cleveland-Cliffs is well on the way for a dramatic rebound in 2025. We can already see the early signals of this rebound in automotive pull, index pricing, and our overall order book. Also, with the addition of Stelco’s spot price driven non-automotive book of business to our footprint, we are even better equipped now to ride this upside than in previous cycles, as we are now less dependent on fixed price contracts.” CC Tuesday at 8:30am ET.
4Q24 CC slides:
https://d1io3yog0oux5.cloudfront.net/_523dceb719d0400c6ec1ddeb2375f728/clevelandcliffs/db/1111/11908/file/CLF+-+Q4+and+FY+2024+Earnings+Presentation+2.24.25.pdf
DewDiligence
3 weeks ago
WSJ highlights transformer bottleneck—bullish for CLF:
https://www.wsj.com/economy/trade/how-tariffs-could-shock-americas-power-system-44c17e86 The power industry has already been experiencing a shortage of transformers, for which demand is expected to jump even more in the coming years.
…The National Renewable Energy Laboratory estimates that about 55% of in-service distribution transformer units are older than 33 years and approaching their end of life. Distribution transformer capacity might need to increase 160% to 260% by 2050 compared with 2021 levels to meet demand, according to the NREL.
…Transformers could become a chokepoint. Only about 20% of transformer demand can be met by the domestic supply chain, according to Wood Mackenzie, which also estimated that transformer prices have already risen 70% to 100% since January 2020 because of inflation for raw materials such as electrical steel and copper. Steel is also an essential component of transformers, and notably, Cleveland-Cliffs is the only domestic producer of grain-oriented electrical steel for them. Assuming that Trump moves ahead with 25% tariffs on Canada and Mexico, and imposes tariffs on copper as well, Wood Mackenzie estimates that transformer prices could increase by an additional 8% to 9%.
DewDiligence
4 weeks ago
US Steel endgame is unclear:
https://www.barrons.com/articles/u-s-steel-stock-nippon-5df112b8 Investors appear confused, and no one knows exactly how the U.S. Steel drama will end.
…On Wednesday, Ancora, a Cleveland-based activist investor with about $10 billion in assets under management, held a conference call outlining its plan for the steel maker. Ancora nominated a majority slate of directors on Jan. 27, making a play for control of the company.
…Keeping track of things on the table: U.S. Steel could be sold to Nippon Steel, get an investment from Nippon Steel, be broken up into pieces, merge with Cleveland-Cliffs, or make a go of it as a standalone company investing in existing operations.
DewDiligence
1 month ago
CLF pre-announces “trough” 4Q24 results:
https://finance.yahoo.com/news/cleveland-cliffs-provides-preliminary-fourth-123200578.html Fourth-quarter 2024 results expectations:
• Steel shipments of 3.8 million net tons
• Revenues of approximately $4.3 billion
• Adjusted EBITDA loss of approximately $85 million
Lourenco Goncalves, Cliffs’ Chairman, President, and CEO said: "Other than the COVID-impacted 2020, 2024 was the worst year for domestic steel demand since 2010. As the largest supplier to the automotive industry in North America, we were especially impacted by muted demand from this sector in the second half of the year. This was the primary driver of our weaker results, particularly in the fourth quarter, which we expect to be the trough as we look forward.
So far into this new year, we have already seen improvements in our order book, both automotive and non-automotive, and are confident that the manufacturing-friendly items on President Trump’s agenda will have an outsized benefit on Cleveland-Cliffs. This includes the recently announced tariffs on Mexico, Canada, and China and the expectation that there is more to come on steel specifically. Stelco has been a major contributor since day 1 and a substantial portion of our expected synergies are already in motion. Based on their experience in 2018, we expect Stelco will benefit from steel tariffs as well. CLF also announced a bond sale of $750M, which has not priced yet (https://finance.yahoo.com/news/cleveland-cliffs-inc-announces-proposed-123400124.html ). The proceeds will be used, in part, to repay the balance on CLF’s asset-based credit facility.
CLF reports full 4Q24 results on 2/24/25.
delerious1
2 months ago
Canada, Mexico Steelmakers Refuse New US Orders
Source: Bloomberg
Some steelmakers in Canada and Mexico are telling customers that they are refusing new orders to the US on concerns that President Donald Trump soon will reimpose duties.
Canada’s Stelco has been telling US-based consumers it is pausing sales quotes, according to a person familiar with the matter. Mexico-based steel suppliers also stopped taking orders for material this week as they await potential action from Trump, according to Flack Global Metals, a large buyer.
Trump this week signaled plans to impose previously threatened tariffs of as much as 25% on Mexico and Canada by Feb. 1. While the two countries are exempt from a sweeping 25% steel tariff the US imposed during the first Trump administration, there’s increasing concern in the industry that the metal won’t receive a carve out.
“There’s a lot of trepidation and changing commercial policy by the Mexican steelmakers with regards to their approach to this market,” Jeremy Flack, chief executive officer of Arizona-based steel distributor Flack Global Metals, said in an interview. “They’re off balance because of this. They’ve gone from concerned to unconcerned to concerned again.”