The Rising Influence of Rising Affluence

[DewDiligence]

CLF—Unless you were looking for a quick flip, I don’t think you missed your chance.

With the debt swap announced yesterday, CLF has given itself more than enough leeway to exploit the growing demand for US steel and thereby boost profitability in its US iron-ore business.

Moreover, the two largest drivers of increasing US steel production are hedges of one another: i.e., lower oil prices boost automobile sales while reducing drilling activity, while higher oil prices do the reverse. So, CLF is pretty well insulated from changes in the price of oil. (This is an observation I haven’t seen made elsewhere.)