Cleveland-Cliffs' third-quarter flat-rolled steel shipments rose 80% from the second quarter as US automakers ramped up production following coronavirus-related closures earlier in the year, the US-based miner and steelmaker said Oct. 23.
Cliffs, which closed its acquisition of AK Steel's steelmaking assets in March, shipped 1.1 million st of flat-rolled steel in Q3, up from 619,000 st in Q2. By comparison, AK's flat-rolled steel shipments totaled 1.3 million st in Q3 2019.
While fleet sales of automobiles remain down by 30% year over year, consumer-driven auto sales have increased in recent months, Cliffs CEO Lourenco Goncalves said in a conference call with industry analysts Oct. 23.
Following the initial restart of US auto production in May, original equipment manufacturers did not really hit their stride in terms of steel orders until mid-August, Goncalves said, with the company expecting the more favorable conditions seen later in Q3 to continue into Q4.
With the recovery seen in US automotive production, Cliffs expects its Q4 flat-rolled steel shipments to be comparable to the 1.25 million st AK Steel shipped in Q4 2019 before its acquisition, CFO Keith Koci said.
Cliffs also expects to close its previously announced acquisition of substantially all of ArcelorMittal's US assets in Q4. The company is currently working through the regulatory approvals on the transaction, Goncalves said, noting what the company can say about the deal is limited until its close.
To date, Cliffs has been happy with what it's seen with ArcelorMittal's assets and is not anticipating any significant divestitures, if it makes any at all, Koci said.
"What we're buying and what we have now is all considered to be core for what we want to do going forward," he said, noting that the company will continue to focus on high-end automotive demand.
Overall, Cliffs reported a Q3 net loss of $10 million on sales of $1.65 billion. This compares with net income of $90.9 million on sales of $555.6 million in the same period a year ago.
