The Rising Influence of Rising Affluence

[DewDiligence]

CLF—On today’s CC, CEO Joseph Carrabba shot holes in the thesis of Credit Suisse’s 3/27/13 report, asserting that CLF’s market share in the US iron-ore segment is not unduly at-risk.

A key flaw in Credit Suisse’s thesis is that CLF intends to sell direct-reduced iron (DRI) to US steelmakers such a Nucor who use an electric-arc furnace. Inasmuch as CLF does not currently sell to such customers, Carrabba expects market-share gains from these new customers to offset and even outweigh any loss of share from CLF’s traditional blast-furnace customers.