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Released February 14, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio), the largest steel supplier for the U.S. automotive market, turned a record profit in 2021, despite a drop in automotive steel demand, the company reported Friday.
Annual net income for 2021 was a record $3 billion, up from a net loss of $81 million in 2020. The company also saw record annual revenue--$20.4 billion--compared with $5.3 billion the year prior. Fourth-quarter net income sat at $899 million, up from $74 million year over year.
Total steel shipments in the fourth quarter were 3.4 million tons, down from 4.2 million in the third quarter, largely due to a decline in automotive production and a drop in demand from service centers and distributors, Chief Financial Officer Keith Koci said during Cleveland-Cliffs' earnings conference call. Automotive steel shipments were about 1.2 million tons during the second quarter, about 300,000 tons less that what the company anticipated in March, as the automotive sector continued to suffer from supply-chain issues, particularly a shortage of semiconductors.
However, a rebound already is underway, according to Chief Executive Officer Lourenco Goncalves, who said automotive deliveries in January were stronger than each of the previous three months.
According to Goncalves, the success in the face of diminished auto demand and sales volumes came as Cleveland-Cliffs started operations in late 2020 at its new hot-briquetted iron (HBI)/direct reduction plant in Toledo, Ohio, and last year acquired two major steel companies (AK Steel and ArcelorMittal USA) as well as a major scrap company, Ferrous Processing and Trading Company (FPT), in November.
"The results we achieved in 2021 are a clear demonstration of how powerful Cleveland-Cliffs has become," Goncalves said.
The company expects 2022 capital expenditures (capex) of $800 million to $900 million to be driven by reliability and environmental projects--namely the Burns Harbor Steel Works Blast Furnace C Reline/Rebuild Project in Indiana. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can see the detailed project reports for the reline/rebuild and upgrades.
Industrial Info is tracking $1.2 billion in active capital and maintenance projects by Cleveland-Cliffs. Another major project is the modernization of its Butler Steel Works in Pennsylvania, which produces electrical steel. Subscribers can click here for a detailed project report.
The steel producer is well-positioned to benefit from the rise in electric vehicles (EVs) and a shift toward environmental, social and governance (ESG) initiatives. "Cleveland-Cliffs has been prepared for the transition from [internal combustion engine] ICE vehicles," Goncalves said on the earnings call, adding, "Cliffs is the only producer in the United States of the electrical steel needed for the modernization of the electrical grid."
The company expects to benefit from the $1.2 trillion bipartisan infrastructure law, of which $65 billion is allocated for modernizing the national grid, and $7.5 billion is attributed to expanding the network of EV chargers--which also require electrical steel.
For information on U.S. EV battery production, see February 7, 2022, article - Automakers Pledge to Electrify Transportation, but Will the Batteries Be There?.
According to Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, the implementation of renewable energy sources and battery metals demand is changing the types of projects being seen throughout the industry. For more information, see February 10, 2022, article - IIR Webinar: Metals & Minerals Project Activity Going Full Steam Ahead.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Annual net income for 2021 was a record $3 billion, up from a net loss of $81 million in 2020. The company also saw record annual revenue--$20.4 billion--compared with $5.3 billion the year prior. Fourth-quarter net income sat at $899 million, up from $74 million year over year.
Total steel shipments in the fourth quarter were 3.4 million tons, down from 4.2 million in the third quarter, largely due to a decline in automotive production and a drop in demand from service centers and distributors, Chief Financial Officer Keith Koci said during Cleveland-Cliffs' earnings conference call. Automotive steel shipments were about 1.2 million tons during the second quarter, about 300,000 tons less that what the company anticipated in March, as the automotive sector continued to suffer from supply-chain issues, particularly a shortage of semiconductors.
However, a rebound already is underway, according to Chief Executive Officer Lourenco Goncalves, who said automotive deliveries in January were stronger than each of the previous three months.
According to Goncalves, the success in the face of diminished auto demand and sales volumes came as Cleveland-Cliffs started operations in late 2020 at its new hot-briquetted iron (HBI)/direct reduction plant in Toledo, Ohio, and last year acquired two major steel companies (AK Steel and ArcelorMittal USA) as well as a major scrap company, Ferrous Processing and Trading Company (FPT), in November.
"The results we achieved in 2021 are a clear demonstration of how powerful Cleveland-Cliffs has become," Goncalves said.
The company expects 2022 capital expenditures (capex) of $800 million to $900 million to be driven by reliability and environmental projects--namely the Burns Harbor Steel Works Blast Furnace C Reline/Rebuild Project in Indiana. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can see the detailed project reports for the reline/rebuild and upgrades.
Industrial Info is tracking $1.2 billion in active capital and maintenance projects by Cleveland-Cliffs. Another major project is the modernization of its Butler Steel Works in Pennsylvania, which produces electrical steel. Subscribers can click here for a detailed project report.
The steel producer is well-positioned to benefit from the rise in electric vehicles (EVs) and a shift toward environmental, social and governance (ESG) initiatives. "Cleveland-Cliffs has been prepared for the transition from [internal combustion engine] ICE vehicles," Goncalves said on the earnings call, adding, "Cliffs is the only producer in the United States of the electrical steel needed for the modernization of the electrical grid."
The company expects to benefit from the $1.2 trillion bipartisan infrastructure law, of which $65 billion is allocated for modernizing the national grid, and $7.5 billion is attributed to expanding the network of EV chargers--which also require electrical steel.
For information on U.S. EV battery production, see February 7, 2022, article - Automakers Pledge to Electrify Transportation, but Will the Batteries Be There?.
According to Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, the implementation of renewable energy sources and battery metals demand is changing the types of projects being seen throughout the industry. For more information, see February 10, 2022, article - IIR Webinar: Metals & Minerals Project Activity Going Full Steam Ahead.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
