The Rising Influence of Rising Affluence

[winchem21]

CLF +12.7% on earnings release of expected news.

There was no substantive news on today’s earnings call.

EBITDA guidance was unchanged for 2021, 3rd quarter EBITDA increased incrementally to $1.9 vs $1.8 billion guided.

No surprise that annual fixed priced contracts (which are 45% of CLF contracts) were being renegotiated at higher rates than 12 months ago when HRC was less than half the current price. Widely publicized these contracts were being renegotiated this fall and going well. HRC futures are still high well into 2022.

The replacement of Northshore with Minorca as source of DR-grade ore for Toledo HBI was the major news of the day, but not completely unexpected given arbitration MSB started that was recently decided against CLF. This has minimal overall impact to earnings and provides leverage to buy / negotiate other deals with MSB or to gain access to Nashwauk.