SSS 2020: Cleveland-Cliffs predicts 2021 revenue of $17bln

Cleveland-Cliffs expects that its pro-forma annual revenue in 2021 will total $17 billion, from which it plans to invest in self-improvements, according to the iron and steelmaker’s top executive.

“We should expect to have at least 12% Ebitda [earnings before interest, taxes, depreciation and amortization] margin in this new company,” chairman, president and chief executive officer Lourenco Goncalves said, referencing Cliffs’ recent deal to acquire ArcelorMittal USA. “And 12% of $17 billion will give you $2 billion Ebitda every year.”

“We need this return-on-invested capital,” he said during a keynote presentation at Fastmarkets’ Steel Success Strategies Online conference on Monday October 26. “Without capital, there will be no investment in new technologies and new ways of producing steel or new equipment. Return-on-invested capital is crucial, and this acquisition plays exactly on that – on creating the critical mass to be self-sufficient and to be able to continue to grow.”

The Cleveland-based iron and steelmaker’s new product line will include pellet, hot-briquetted iron (HBI), high-end rolled steel – particularly galvanized – and automotive parts and components, according to Goncalves.

“We absolutely believe manufacturing in the United States – and particularly automotive manufacturing – has a very bright future,” he said.
  
The next phase of the company’s evolution will focus on environmentally friendly and socially conscious steelmaking, he added.

Goncalves also noted that Cliffs’ new HBI plant in Toledo, Ohio, is just “weeks away” from starting production.

He believes the company’s HBI will be an attractive alternative to imported pig iron because it will be more environmentally friendly and available on shorter lead times without significant freight costs.

Sign up here for Fastmarkets’ free webinar on November 4, 2020, beginning at 9am GMT: European flat steel market – on the mend after the Covid-19 fallout?
– Overview of EU flat steel price developments in 2020 so far
– Suppliers’ response to the drop in demand 
– Fortress Europe? Toughening of trade defense measures
– The survival of European steelmakers facing high raw material costs
– Demand contraction and a slow path to recovery
– Near-term price outlook

What to read next
Fastmarkets has corrected its MB-STE-0034 steel domestic plate 8-40mm, exw Northern Europe and MB-STE-0035 Steel domestic plate 8-40mm, exw Southern Europe assessments, which were published incorrectly on Wednesday March 27.
Fastmarkets is inviting feedback from the industry on the pricing methodologies for its steel hot-rolled coil index domestic, exw Northern Europe, €/tonne (MB-STE-0028) and steel hot-rolled coil index, fob mill US Midwest, $/cwt (MB-STE-0184) as part of its annual methodology review process.
Weak demand in both the UK domestic and export steel scrap markets has created a glut of supply and brought a raft of cheaper offer prices into British steelmakers for monthly delivery settlements in March, trade sources told Fastmarkets in the week ended Tuesday March 12
This consultation, which is open until April 10, 2024, seeks to ensure that our methodologies continue to reflect the physical graphic paper market, in compliance with the International Organization of Securities Commissions’ (IOSCO) Principles for Price Reporting Agencies (PRAs). This includes all elements of our pricing process, our price specifications and publication frequency. Fastmarkets FOEX […]
Key milestones, opportunities and challenges facing the European steel industry on the path to decarbonization
This consultation, which is open until April 3, 2024, seeks to ensure that our methodologies continue to reflect the physical market under indexation, in compliance with the International Organization of Securities Commissions (IOSCO) Principles for Price Reporting Agencies (PRAs). This includes all elements of our pricing process, our price specifications and publication frequency. Please find […]