Cleveland Cliffs Inc (CLF)

[greasemonkeyshoes]

Price impact on HRS due to increased MET coal pricing???????
http://www.barrons.com/articles/u-s-steel-buy-dont-recoil-at-the-pullback-1474884600
Highlights:
The significant increase in Australian coking coal prices is very bullish for U.S. steel/scrap prices in our view and should result in cost push hot-rolled coil (HRC) inflation near $40-$50 a ton in the fourth quarter, effectively closing the arbitrage window into the U.S. Lastly, the petition filed last night by U.S. producers against China could sharply limit Vietnamese exports of cold-rolled coil (CRC) and coated products. We are updating our model to reflect marked-to-market commodity prices as well as U.S. Steel’s recent equity raise.

The recovery in European and Asian sheet markets coupled with the approximate $75-per-ton correction in the U.S. market has significantly narrowed the import arbitrage, and we expect sharply lower import levels starting in first-quarter 2017.

Based on our investor conversations recently, we believe the market has become way too negative on domestic flat-rolled fundamentals, which overall remain strong despite various headwinds.

ps-"Inflation near $40-$50 a ton in the fourth quarter",could this be the next "white swan" event and upsets the Credit Suisse $2.00 price objective for clf?Since revenue realized is based on HRS price sensitivity,Verrrry likkkkelyyyyy Credit Suisse would be embarrassed again by LG during the upcoming call.

ps2-clf guidance:HRS of $450 has been upgraded to $475 in Q2,and likely to be increased to $525,or above $80 USIO realized price per long ton.Wooowww.