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Cliffs Natural Resources: Weak Outlook in a Challenging Market (Continued from Prior Part) Cliffs and the US steel industry
Cliffs Natural Resources (CLF) is the largest supplier of iron ore pellets to US steelmakers. The US steel production trends can help you decipher the health of Cliffs and other integrated iron ore producers in the United States, such as AK Steel (AKS), ArcelorMittal (MT), and US Steel (X).
Declining steel production
The above chart shows the trend in US steel production, with data released on a weekly basis by the American Iron and Steel Institute. For the half-year ending in June, US steel production has declined 6.5%, compared with the same period last year. The US steel industry’s capacity utilization ratio also declined to 72.4%, from 77.3% in the same period last year.
Steel imports from other countries, including China, present the major reason for lower production and capacity utilization. Ongoing cheaper imports led some integrated steelmakers to close some of their iron ore mines. Steel Dynamics (STLD) has idled its Minnesota iron-making operations for at least 24 months. Previously, AK Steel (AKS) wrote off its investment in the Magnetation joint venture. We’ll talk more about this and its impact on Cliffs later in the series. AK Steel forms 3.2% of the SPDR S&P Metals and Mining ETF (XME).
However, recently we’ve seen import pressures subsiding due to trade cases and anti-dumping litigation. This could offer an upside to the steelmakers and, ultimately, Cliffs.
In the next part of this series, we’ll see how steel prices in the US are progressing. This could have a significant bearing on Cliffs Natural Resources’ fortunes.
Continue to Next Part Browse this series on Market Realist:
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CLIFFS Natural Resources
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PRODUCTEUR |
CODE : CLF |
ISIN : US18683K1016 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
CLIFFS Natural Res est une société de production minière de fer basée aux Etats-Unis D'Amerique. CLIFFS Natural Res est productrice de fer, de charbon au Bresil, au Canada et en Australie, et détient divers projets d'exploration au Canada. Ses principaux projets en production sont WABUSH MINE, EMPIRE AND TILDEN MINES, HIBBING TACONITE, NORTHSHORE MINE, UNITED TACONITE, OAK GROVE MINE, GREEN RIDGE MINE et PINNACLE MINE au Canada, AUSTRALIAN IRON ORE et SONOMA en Australie et AMAPA au Bresil et ses principaux projets en exploration sont MT JACKSON J1 en Australie et DIAGNOS, WAWA, FREEWEST, MC FAULD'S LAKE, MACFADYEN, WAWA CLAIMS et BIG DADDY au Canada. CLIFFS Natural Res est cotée aux Etats-Unis D'Amerique, en Allemagne et en France. Sa capitalisation boursière aujourd'hui est 5,3 milliards US$ (5,0 milliards €). La valeur de son action a atteint son plus haut niveau récent le 16 mai 2008 à 99,17 US$, et son plus bas niveau récent le 15 janvier 2016 à 1,20 US$. CLIFFS Natural Res possède 297 400 968 actions en circulation. |