Latest news with #Cliffs
Mint
09-05-2025
- Automotive
- Mint
Trump's tariffs aim to boost steelmakers. One of the biggest is shrinking instead.
President Trump's tariffs on imported steel aim to boost demand for American steel. So far, they haven't stopped one of the country's biggest steelmakers from closing plants and retreating from its strategy to dominate the industry. Cleveland-Cliffs, the top supplier of sheet steel to automakers in the U.S., has in recent months idled plants and iron-ore mines. This summer, the company plans to close three specialty steel plants in Pennsylvania and Illinois. It is shelving expansion projects, and executives said Thursday it could sell some assets. The Cleveland-based company's retrenchment shines a spotlight on an increasingly difficult steel market. The U.S. manufacturing sector—led by the auto industry—weakened in the past year, causing steel buyers to cut back on purchases and pushing prices lower. For many steel companies, 2024 was the worst year in nearly a decade. Steel prices climbed as buyers gobbled up steel to get ahead of Trump's duties on imported metal. That rally has stalled, though, with steel customers sitting on the steel they have and holding off on placing big orders in an uncertain U.S. economy. 'We know that in the long run this will be good for the American steel industry and for Cleveland-Cliffs," Chief Executive Lourenco Goncalves told analysts on a conference call Thursday about Trump's tariff plan. 'However, in the short term, we need to do everything we can to make sure that we remain cost competitive." Shares of Cliffs, the second-largest steelmaker in the U.S. by volume, have lost more than a third of their value in the past six months, a bigger decline than its rivals. The company this week reported a first-quarter net loss of $483 million, its third consecutive quarterly loss. The production cuts and changes in operations are expected to affect about 2,000 jobs and save Cliffs $300 million a year. Goncalves said the moves will sharpen Cliffs's focus on its primary business of supplying steel to the automotive industry. Goncalves is still counting on tariffs on imported vehicles to bring more automobile assembly to the U.S. and increase demand for the company's lightweight steel used in fenders, hoods and other vehicle parts. He said Cliffs has received commitments from automotive customers to increase order volumes, a move that would boost the company's profit. Five years ago Goncalves embarked on a bold strategy to turn Cliffs—an iron-ore miner—into a steelmaker. By acquiring steel plants and companies at bargain prices, the Brazilian executive built Cliffs into a company able to convert its own iron ore into finished steel. The plan isn't aging well. Cliffs ended up with some underperforming business lines and a lineup of mostly older plants that are expensive to operate. Some need significant investments in the years ahead. Cliffs expects to cut spending on plants and equipment by more than 20% from last year and delayed some projects. Three plants will be closed this summer: two in eastern Pennsylvania that produce rail for railroads and steel plate, and one near Chicago that makes specialty sheet steel. Goncalves said the plants have underperformed, especially the rail mill. He accused Japan's Nippon Steel of selling rail in the U.S. at heavily discounted prices even with a U.S. tariff. 'Nippon Steel has no limits," he said. Nippon Steel didn't immediately respond to a request for comment. Cliffs is abandoning plans to make electric transformers at its closed plant in Weirton, after a partner had 'second thoughts" about the plan, Goncalves said. Weirton had produced steel for cans but closed last year. After an unsuccessful bid for U.S. Steel—and then attempting to stop Nippon Steel from doing the same—Cliffs turned its attention north, purchasing Canadian steelmaker Stelco for $2.5 billion. The deal closed just days before voters returned Trump to the presidency after he campaigned to use tariffs aggressively against U.S. trading partners. A 25% tariff on steel from Canada took effect in March. About one-third of Stelco's annual sales had been to U.S. customers before the steel tariff, but Cliffs now restricts the company's sales to Canada. Goncalves said he didn't anticipate broader U.S. tariffs on other Canadian products impairing steel-consuming manufacturers or the recent hostility in relations between the U.S. and Canada. 'That was not part of our plan," he said. 'Otherwise, I would not have been so eager to buy Stelco, if I knew that Canada would not be treated like a friend." Write to Bob Tita at
Yahoo
01-05-2025
- Business
- Yahoo
SunCoke Energy Inc (SXC) Q1 2025 Earnings Call Highlights: Navigating Market Challenges with ...
Consolidated Adjusted EBITDA: $59.8 million for Q1 2025, down from $67.9 million in Q1 2024. Net Income: $0.20 per share for Q1 2025, down $0.03 from the prior year period. Domestic Coke Adjusted EBITDA: $49.9 million for Q1 2025. Coke Sales Volumes: 898,000 tons for Q1 2025. Logistics Adjusted EBITDA: $13.7 million for Q1 2025, up from $13 million in Q1 2024. Terminals Throughput Volumes: 5.7 million tons for Q1 2025, up from 5.5 million tons in Q1 2024. Cash Balance: $193.7 million at the end of Q1 2025. Liquidity Position: $543.7 million at the end of Q1 2025. Net Cash Provided by Operating Activities: $25.8 million for Q1 2025. Capital Expenditures: $4.9 million for Q1 2025. Dividends Paid: $10.9 million at a rate of $0.12 per share for Q1 2025. Full Year Consolidated Adjusted EBITDA Guidance: Reaffirmed at $210 million to $225 million. Warning! GuruFocus has detected 4 Warning Sign with SXC. Release Date: April 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SunCoke Energy Inc (NYSE:SXC) delivered strong consolidated adjusted EBITDA of $59.8 million for Q1 2025. The logistics business performed well, with an increase in adjusted EBITDA driven by higher transloading volumes at CMT. The company announced a $0.12 per share dividend, maintaining shareholder returns. SunCoke Energy Inc (NYSE:SXC) ended the quarter with a strong liquidity position of $543.7 million. The Granite City Coke supply agreement with US Steel has been extended, providing stability in operations. Net income per share decreased by $0.03 compared to the prior year period. Consolidated adjusted EBITDA decreased from $67.9 million in the prior year period, primarily due to lower economics on the Granite City contract extension. The domestic coke business faced challenges with lower spot blast coke sales volumes due to market conditions. The steel industry outlook remains uncertain and volatile, impacting future performance expectations. Capital expenditures are expected to be lower than the initially planned $65 million due to cautious spending in the current environment. Q: Your annual guidance implies an uplift in quarterly adjusted EBITDA. Can you speak to the cadence, especially regarding assumptions in the second half with more spot exposure? A: Shantanu Agrawal, Vice President - Finance, Treasurer, explained that the cadence is affected by the expiration of the Cliffs contract at Haverhill in June 2025. They are working to spread shipments evenly throughout the year, which will result in margins from these shipments appearing in the second half, leading to stronger EBITDA in the latter part of the year. Q: What are your updated views on capital allocation priorities, especially with the GPI project on hold? A: Katherine Gates, President and CEO, stated that they are looking for profitable growth opportunities beyond the GPI project. They remain disciplined in seeking growth that rewards long-term shareholders. They plan to continue dividends in 2025 while preserving cash for the Granite City project. Q: What drove the inventory build on the coal side? Was it due to weaker spot demand or shipment timing? A: Mark Marinko, CFO, clarified that the inventory build was due to the beginning-of-year coal blend buildup, which is a normal seasonal occurrence. They expect this to reverse, reaffirming their cash flow guidance. Q: Can you provide more details on CapEx spending, given the low first-quarter expenditure and full-year guidance of $65 million? A: Katherine Gates mentioned that they are being judicious with spending due to uncertainties. They might not spend the full $65 million planned for the year, focusing on essential projects like the KRT expansion while deferring less critical investments. Q: Could you provide insights into the health of the foundry and export coke markets? A: Katherine Gates noted that the pricing environment is challenging, and they have sold early in the year to mitigate risks. They are in continuous dialogue with Cliffs regarding contracts, but the market outlook remains uncertain. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
21-03-2025
- Business
- Yahoo
Cleveland-Cliffs set to layoff 630 steelworkers at Minorca, Hibbing Taconite
The Hull Rust Mine View in Hibbing that overlooks Hibbing Taconite. Photo by Jerry Burnes/Iron Range Today. Republished with permission from Iron Range Today. Cleveland-Cliffs issued layoff notices to 630 employees as it plans to temporarily idle its Minorca mine and Hibbing Taconite, the company confirmed Thursday. State Sen. Grant Hauschild, DFL-Hermantown, first announced the layoffs earlier in the day. Cliffs did not specify how many jobs at each site would be impacted, but a press release from Hauschild indicated 340 at Minorca and 250 at HibTac. Chris Johnson, president of the United Steelworkers Local 2705 representing HibTac, said the number of union employees was 'roughly 240.' About 42 salaried employees and 300 bargaining unit employees are expected to be impacted at Minorca in Virginia. In a letter to the union, obtained by Iron Range Today, the company said 230 bargaining unit employees would be laid off by May 20, 2025, or within two weeks after that time. Others could be laid off earlier 'depending on business needs' and would remain on active status to receive full salary and benefits until May 20. 'While we anticipate these layoffs will be temporary, we cannot predict their length, which may exceed six months,' wrote Robert H. Fischer, executive vice president of human resources and labor relations, in the letter. Overall economic factors, especially around the automobile industry, are playing the biggest factor in the move. Cliffs reported $400 million in losses in the fourth quarter of 2024, citing the automotive woes. The majority of pellets produced at Iron Range mines help feed that industry its steel supply. A full idle is planned at Minorca and a partial idle for HibTac. Johnson said the plant will shut down two of its three furnaces and produce minimal tonnage, with about half its employees. 'These temporary idles are necessary to re-balance working capital needs and consume excess pellet inventory produced in 2024,' the company said in a statement. '630 employees will be impacted following the completion of the 60-day WARN period. We remain committed to supporting our employees and communities while monitoring market conditions.' The bigger concern around HibTac is the mine's looming ore shortage. It's been estimated it will run out of ore to mine by 2026 in the more optimistic forecasts. Johnson said the partial idle will help expand the overall mine life, but the long-term picture is unclear. 'Our worry is if this is what we're going to look like until we get our ore reserves?' he said. 'Are those 240 people coming back? We know the company can't really give us an answer.' The economic impact of mine closures or idles, and layoffs, have had ripple effects across Iron Range communities in the past. Anything permanent at HibTac is expected to have strong reverberations around the cities of Hibbing and Chisholm, but Johnson said this round of layoffs will have impacts Range-wide. It's unclear if similar steps could be taken at other mines in the region. Beyond the economy, the production tax formula that distributes funds to counties, cities and schools on a three-year rolling average would be increasingly impacted if idles were prolonged. Johnson said employees have been offered a chance to transfer within Cliffs, but with Minorca idling and the uncertain economic landscape, local mines would unlikely be able to absorb everyone. Relocation is an option, he added, but a lot of members don't want to move their families. 'Everyone suffers — from the gas stations to the grocery stores and restaurants, everyone suffers,' he said. 'Until the auto industry and the economy turn around, it's gonna hurt.' Ore reserves for the mine are in different stages of possibilities today. Land leased to Cliffs at the former Butler Taconite site near Nashwauk are the source of a legal battle between the company and Mesabi Metallics, who so far has seen favorable court rulings in its efforts to evict Cliffs. State mineral leases at the same site were awarded to Cliffs in 2023, and the company owns mineral rights on land around those pieces, but mining there likely meant a temporary idle period for HibTac. Major costs and additional permitting scuttled a plan to transfer ore from United Taconite for processing at Hibbing Tacontie. Land bordering HibTac, known collectively as the Carmi-Campbell, is owned by Cliffs' bitter rival U.S. Steel, and their recent dust ups make for slim chances of a land swap. 'This is difficult news for our Steelworkers, their families, and our entire Iron Range community,' Hauschild said. 'Mining isn't just an industry here — it's our way of life … when our Steelworkers hurt, we all hurt.'
