| Is there More Downside to Cliffs’s USIO Division Volume Guidance? | |
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Will Cliffs Natural Resources Weather the Storm in 3Q15 Results? (Continued from Prior Part) Volume downgrade
In its 2Q15 results, Cliffs Natural Resources (CLF) downgraded its volume guidance for the US iron ore (or USIO) division for 2015, from 20.5 million tons to 19 million tons. Cliffs mentioned lower capacity utilization among US steel mills as the major reason for the downgrade. In turn, lower utilization was due to heavy steel imports into the country.
Expectations from 2H15
Cliffs’s management was more optimistic regarding the second half of 2015. Management expects US steel imports to moderate in the second half of the year as steel imports respond to anti-dumping lawsuits filed by steelmakers. This could be one of the major catalysts for Cliffs to upgrade its volume guidance back.
US steel production
However, steel imports into the United States don’t seem to have slowed down much, at least in 3Q15. As the above graph shows, the US steel production trend has mostly been downward to flat since June. Capacity utilization for US steelmakers is also quite low.
According to the Association of North American Steelmakers, the year-to-date steel production through October 10, 2015, was down 8% year-over-year (or YoY) while capacity utilization rates were 72.5%, lower than 77.8% recorded last year.
This in turn is negatively impacting US steelmakers, including US Steel (X), Steel Dynamics (STLD), Nucor (NUE), AK Steel (AKS), and ArcelorMittal (MT). Since Cliffs is the pellets supplier to US steelmakers, declining utilization rates and declining steel production in the United States is expected to negatively impact US sales volumes going forward. Nucor and US Steel form 8.1% of the SPDR S&P Metals and Mining ETF (XME).
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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. |