Cleveland-Cliffs Inc

Steel stocks have bounced back and Cleveland-Cliffs (CLF) and U.S. Steel (X) look strong this week. Is there more upside left in the stocks?

CLF released its second-quarter earnings on July 22. The stock fell sharply on the earnings miss. Should you buy or sell the stock now?

Cleveland-Cliffs stock has come off its highs. Why is the stock falling and will it go back up on pumping from Reddit group WallStreetBets?

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CLF is the latest entrant to the Reddit group WallStreetBets. What's the forecast for CLF stock and how high can it go in the short squeeze?

Recently, Wall Street analysts downgraded the buy rating on Cleveland-Cliffs stock. Now, they recommend holding Cleveland-Cliffs.

Rio is the largest owner and operator of autonomous—driverless—trucks in the world. These initiatives are part of Rio’s “Mine of the Future” program.

Cleveland-Cliffs (CLF) stock is scheduled to post its earnings on April 22. What is CLF stock's forecast and will it rise after the earnings?

Recently, X and CLF upgraded their earnings guidance due to strong end market demand and rising U.S. steel prices. Is there more upside to these stocks?

Cleveland-Cliffs (CLF) stock has lost 23 percent in the last few days. Looking at its future prospects, is CLF a good stock to buy now?

Cliffs Natural Resources’ (CLF) new management changed the terms of its debt agreement to repurchase the company’s shares. The shares are worth up to $200 million.

US iron ore (or USIO) is the main driver for Cleveland-Cliffs’s (CLF) top and bottom lines.

AK Steel is working towards stable margins throughout the business cycle. AK Steel has deliberately lowered its exposure to spot markets (X) (CLF).

Aggregate financing in China (MCHI) came in at 1.6 trillion yuan in November 2017.

China’s credit growth clearly has been weaker than expected, especially given the recent easing measures adopted by the government.

China’s October fixed asset investment, real estate investment, and industrial production data are all expected to be released on November 14.

In March 2018, President Donald Trump imposed a tariff of 25% on steel imports. What’s happened since?

Under equipment, the focus is on increasing availability, utilization, and rate. A 6% increase in utilization helped achieve a 9% increase in group production in FY14.

AK Steel (AKS) reported adjusted EBITDA of $69.2 million in 3Q17, compared with $142 million in 2Q17 and $157 million in 3Q16.

The immediate impact of Chinese credit easing was seen as China’s iron ore and rebar futures posted their strongest gains in three weeks.

FAI is a good indicator of how much investment occurs in a country or region. It’s a closely watched indicator of construction activity in China.

Since 98% of mined iron ore goes into making steel, it’s important to track steel production. China consumes two-thirds of seaborne iron ore.

Citigroup (C) upgraded Rio Tinto’s (RIO) rating from “sell” to “neutral” on June 6, 2016. The broker also raised the target price for the stock from 20 pounds to 21 pounds.

Japan accounts for 10%–13% of the seaborne market, so Japanese iron ore imports are another good indicator of demand.

U.S. Steel (X) expects its slab production capacity to increase by 1.0 million tons by 2020 from the current level of 10.0 million tons.

Market analysts have started turning bearish on Cliffs Natural Resources (CLF). There are many downgrades. The target price has been revised down in recent weeks.

BHP had been contemplating whether to sell the non-core assets or go for a demerger. Finally, the company decided in favor of a demerger on August 15. The proposed company will likely have assets in the range of $12–$20 billion.

Cleveland-Cliffs’ management noted during its 4Q16 earnings call that it is expecting to generate FCF of $550 million in 2017.

Steel stocks have been consolidating for the last few trading sessions. But so far, they’re having a tepid year.

The average target price for CLF is $3.4 compared to its current market price of $4.9. The target price still implies a downside potential of 30%.

China’s steel and aluminum overcapacity has earned it the ire of several countries.

After the imposition of Section 232 steel and aluminum tariffs last year, several observers warned that we could see a spike in downstream imports.

In this series, we’ll see how Vale is planning to deal with the current volatile commodity price environment.

China is the world’s largest steel consumer, steel producer, and steel exporter. It dominates the global steel markets probably like no other country ever has.

Iron ore prices are down 19% year-over-year (or YoY) and coal prices are down 30% YoY—volumes were also down YoY, but the stock rallied 7% in a single trading session the next day of the earnings call and up 3% the subsequent trading day.

Bank of America Merrill Lynch has raised its 2017 hot rolled coil steel forecast to $700 per ton. The brokerage also upgraded U.S. Steel (X) from a “neutral” to “buy.”

Among the US steel and iron ore peers, Nucor (NUE) is trading at the highest forward multiple of 7.7x.

U.S. Steel (X) lowered its 2018 EBITDA guidance due to the recent correction in spot steel prices.

In 2Q17, Cleveland-Cliffs (CLF) achieved 4% growth year-over-year in US volumes to 4.3 million tons.

Brazilian exports show how much volume is shipped out of Brazilian ports to China and the rest of the world. Along with exports from Port Hedland, Australia, this is an important supply side indicator.

Almost all of the iron ore miners are cutting costs, which is driving the cost curve down. This will put additional pressure on prices.

One of the most dominant factors driving iron ore’s price rally is rising steel production and the resulting increase in steel prices in China (FXI).

Over the past few months, we’ve seen that China (MCHI) (ASHR) is transitioning from a manufacturing-based to consumption-based economy.

According to the China Iron and Steel Association, China’s 2015 crude steel output could decline by as much as 2%. This estimate is lower than CISA’s March estimate of a 1.1% decline.

AK Steel (AKS) reported its third-quarter earnings on October 25 after the markets closed. The company reported revenues of $1.74 billion.

Cleveland-Cliffs (CLF) is scheduled to release its 3Q17 results before the US market opens on October 20. In this series, we’ll look ahead to CLF’s earnings and management call.

Cleveland-Cliffs (CLF) will release its second-quarter results before the market opens on July 20.

During the second-quarter earnings call, U.S. Steel Corporation raised its 2018 EBITDA guidance to $1.85 billion–$1.90 billion.

Cliffs announced that it is going to temporarily idle its iron ore pellet production at its Northshore Mining operation in Minnesota by December 1, 2015.

U.S. Steel Corporation (X) released its 1Q18 earnings results yesterday. While the company’s earnings beat analysts’ estimates, its 2018 guidance seems to have spooked markets.

U.S. Steel Corporation (X) produces steel in blast furnaces and uses coking coal and iron ore (CLF) as raw material.

Vale SA will cut the high-cost iron ore production from its Southern and Southeastern systems by 25 million–30 million tons per year. Its 2015 iron ore guidance production is unchanged at 340 million tons.

Vale’s total volumes should see a significant boost from iron ore volumes as its S11D project starts commercial production.

Cliffs Natural Resources’ results for 4Q16 were hugely positive and beat the market expectations by a wide margin.

Most of Cliffs Natural Resources’ revenues and earnings are tied to the US steel industry. Steel prices are also a component of Cliffs’ pricing formula.

Valuation multiple The EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple is a widely used relative valuation multiple for capital-intensive industries such as metals and mining. It takes into account a company’s capital structure. By using this multiple, we can compare companies’ valuations. Miners’ EV-to-EBITDA Vale (VALE) has a forward EV-to-EBITDA multiple […]

In April, China’s steel production surpassed the previous monthly record of 72 million achieved in March 2017 by producing 72.78 million tons.

Cliffs Natural Resources’ average realized prices were 0.5% lower YoY in 4Q16 at $73.8 per ton.

US steel has seen a change in fortunes this year. Trump’s win has been a positive catalyst for the industry.

Major iron ore producers are further reducing costs to weather the current market downturn.

Cleveland-Cliffs (CLF) has witnessed a turnaround of sorts in the last four years.

On June 9, 2016, Cliffs announced that it will be reopening its United Taconite plant in northeastern Minnesota two months early due to a contract with U.S. Steel Canada.

U.S. Steel Corporation (X) released its second-quarter earnings on August 1 after the market closed. Its revenues were $3.6 billion.

In the past year, analysts have raised their revenue projections for Cliffs from ~$1.8 billion to ~$2.0 billion for the year.

China’s aggregate financing stood at ~3.7 trillion Chinese yuan in January 2017, as compared to 1.6 trillion yuan in December 2016.

In 4Q16, Cliffs’ cash costs of goods sold for APIO was $36.4 per ton, or 8% higher YoY.

For the first time in two years, in November, iron ore prices crossed the $80 per ton level, and YTD gains for the steel-making commodity have reached 82%.

Cliff’s Natural Resources has long-term contracts with US steelmakers and is thus affected more by what’s happening in US steel than in seaborne iron ore.

Cliffs Natural Resources (CLF) is trading at a forward EV-to-EBITDA multiple of 13.2x, compared to its last-five-year average of 9.6x. Its stock price has risen 40% in the last month.

Blue Ridge Capital is a New York–based hedge fund founded in 1996 by Tiger Cub John Griffin. The fund generally targets “absolute returns.”

Rio Tinto has received a boost due to its recent announcement regarding $5 billion of additional free cash flow generation through productivity improvements.

Seaborne iron ore prices have held firm in 2016 and 2017 YTD, despite market participants calling for a downturn.

Iron ore prices reached a six-month high of $62.7 per ton on October 26, 2016, bringing the YTD (year-to-date) gains for the commodity to an impressive 46%.

Cliffs Natural Resources (CLF) is trading at a forward EV-to-EBITDA multiple of 12.9x, compared to its trailing-five-year average of 9.6x.

Cliffs has “buy” and “sell” recommendations from 22% of analysts each, while 56% of the analysts are recommending a “hold.”

Of the analysts covering Cliffs, one analyst has a “buy” recommendation, eight have “hold” recommendations, and six have “sell” recommendations.

Cliffs Natural Resources (CLF) is the largest and lowest-cost supplier of iron ore pellets in the United States.

Iron ore prices were very strong in 2016 and have remained so year-to-date. Prices increased by more than 80% in 2016.

While US steel prices rose to a high of $660 per ton in March 2017, they fell to $580 per ton in June.

ArcelorMittal’s 2Q17 earnings ArcelorMittal (MT), the world’s largest steelmaker, is scheduled to release its 2Q17 earnings on July 27. Analysts polled by Thomson Reuters expect the company to post revenue of $17.4 billion in 2Q17. ArcelorMittal posted revenue of $16.0 billion in 1Q17 and $14.7 billion in 2Q16. ArcelorMittal’s 2Q17 EBITDA (earnings before interest, tax, […]

China’s automotive sales fell in July. According to the China Association of Automobile Manufacturers, China’s vehicle sales stood at ~1.89 million vehicle units.

US steel prices and order books for customers are the major revenue drivers for Cliffs Natural Resources’s (CLF) US division.

During U.S. Steel’s 4Q16 earnings call, markets would expect more updates from the company regarding its 2017 coal contracts.

In this article, we’ll look at ArcelorMittal’s (MT) valuation multiples ahead of its 2Q17 earnings.

China has been reeling under its overcapacity in the steel industry. In 2016, China planned to cut 45 million tons but wound up cutting 80 million tons.

Cliffs Natural Resources (CLF) is mainly an iron ore producer. A small percentage of its revenue comes from metallurgical coal sales.

Most of Cliffs Natural Resources’ (CLF) revenues and earnings are derived from its US steel division. This makes its drivers unique among peers.

China imported 92 million tons of iron ore in January 2017—a growth of 12.0% YoY and 3.4% month-over-month.

Some analysts expect US steel demand to soften. The Section 232 tariffs have led to higher steel prices in the United States.

Cliffs CEO Laurenco Goncalves mentioned during the Goldman Sachs conference on November 16 that the percentage of domestic steel on the market is ~70%.

China produced 808.4 million tons of steel in 2016 and 68.9 million tons of steel products in December 2016—a YoY 7.1% rise.

In this part of the series, we’ll look at Cleveland-Cliffs’s (CLF) valuation and compare it to its US steel peers.

US steel production trends are a good indicator of the health of Cliffs and other integrated iron ore producers in the United States.

Since US steel demand is the major driver behind steel companies’ volumes and prices, it’s important to track the data for Cliffs Natural Resources (CLF).

On July 31, 2017, Cliffs Natural Resources (CLF) announced a tender offer for a $575.0 million aggregate principal amount of its 5.75% guaranteed notes due in 2025.

China’s iron ore imports contracted 14% month-over-month and 1% year-over-year (or YoY) in the month of August to 74.12 million tons.

By tracking credit growth in China, investors can gauge patterns that forecast future demand.

In this series, we’ll see what investors could expect from Cliffs Natural Resources’ (CLF) 2Q17 earnings report. CLF stock has gained 23% in the last 15 trading days.

Among the stocks under review in this series, Vale SA (VALE) has given the highest trailing-three-month return of 36.4%, while Rio Tinto (RIO) has generated the lowest return of 15.4%.

Iron ore makes up 38% of BHP Billiton’s (BHP) revenues and 42% of its EBITDA.