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Researched by Industrial Info Resources (Sugar Land, Texas)--Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) transformed in a big way last year, following its acquisitions of AK Steel and ArcelorMittal USA. With a wide swath of new and existing assets -- from iron ore extraction through automotive production and manufacturing -- the company's targeted 2021 capital expenditures (capex) are in the range of $600 million to $650 million, up from $500 million spent in 2020.
"One year ago, Cleveland-Cliffs was producing fairly zero tons of steel. And we are now, one year later, the largest flat-rolled steel company in North America," Chief Executive Officer Lourenco Goncalves said during the company's fourth-quarter and full-year 2020 earnings conference call.
For more information, see February 26, 2020, article - Cleveland-Cliffs Looks to AK Steel Acquisition, New HBI Plant for Positive Outlook in 2020, and September 28, 2020, article - The Iron Giant: Cleveland-Cliffs Strives for Bigger, Better Things with ArcelorMittal USA Acquisition.
Cleveland-Cliffs' 2021 capex includes sustaining capital of about $500 million, including $147 million in fourth-quarter spending from ArcelorMittal, and $60 million held over after completing construction of the hot-briquetted iron (HBI) plant in Toledo, Ohio. The remaining amount is expected to go toward minor growth projects.
Goncalves also expects to play catch-up with maintenance at some of ArcelorMittal's existing assets that saw reduced spending over the past one to two years.
Industrial Info is tracking project activity by Cleveland-Cliffs and its subsidiaries worldwide, worth $2.61 billion, including $283.86 million worth in the U.S. that are planned to kick off construction in 2021.
Click on the image at right for a graph showing Cleveland-Cliffs' 2021 project kickoff activity in the U.S., by project type.
2021 Project Kickoffs
Industrial Info is tracking six project kickoffs for Cleveland-Cliffs at its steel works plant in Cleveland, Ohio, which produces 3.8 million tons per year, including three already under construction:
Meanwhile, subsidiary AK Steel is proceeding with $3 million of basic oxygen furnace rebuilds at its steel works plant in Dearborn, Michigan, as part of a capital improvement program that occurs every two years. Completion is expected in late October. For more information, see Industrial Info's project report.
Steelmaking revenue in fourth-quarter 2020 was about $2.2 billion, compared with just $534 million year-over-year. About $859 million, or 41%, of that came from the automotive market.
"We feel extremely comfortable that our leadership position in automotive is very solid," Goncalves said. And after automotive steel production of 3 million tons per year, "the acquisition of [ArcelorMittal USA] elevated our participation in automotive to 5 million tons per year."
Fourth-quarter earnings of $74 million were up from $63 million year-over-year. However, Cleveland-Cliffs suffered a full-year net loss of $81 million, compared with earnings of $293 million in 2019.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
"One year ago, Cleveland-Cliffs was producing fairly zero tons of steel. And we are now, one year later, the largest flat-rolled steel company in North America," Chief Executive Officer Lourenco Goncalves said during the company's fourth-quarter and full-year 2020 earnings conference call.
For more information, see February 26, 2020, article - Cleveland-Cliffs Looks to AK Steel Acquisition, New HBI Plant for Positive Outlook in 2020, and September 28, 2020, article - The Iron Giant: Cleveland-Cliffs Strives for Bigger, Better Things with ArcelorMittal USA Acquisition.
Cleveland-Cliffs' 2021 capex includes sustaining capital of about $500 million, including $147 million in fourth-quarter spending from ArcelorMittal, and $60 million held over after completing construction of the hot-briquetted iron (HBI) plant in Toledo, Ohio. The remaining amount is expected to go toward minor growth projects.
Goncalves also expects to play catch-up with maintenance at some of ArcelorMittal's existing assets that saw reduced spending over the past one to two years.
Industrial Info is tracking project activity by Cleveland-Cliffs and its subsidiaries worldwide, worth $2.61 billion, including $283.86 million worth in the U.S. that are planned to kick off construction in 2021.
Click on the image at right for a graph showing Cleveland-Cliffs' 2021 project kickoff activity in the U.S., by project type.2021 Project Kickoffs
Industrial Info is tracking six project kickoffs for Cleveland-Cliffs at its steel works plant in Cleveland, Ohio, which produces 3.8 million tons per year, including three already under construction:
- A $10 million 2021 maintenance shutdown, to be performed throughout the year; see project report.
- A $100 million C5 blast furnace rebuild/reline, in order to return the 4,350-ton-per-day furnace to optimal performance. Completion is expected in April; see Industrial Info's project report.
- An $8 million cooling water pipe replacement, to upgrade 70- to-80-year-old pipes and support the C5 blast furnace reline. Completion is expected in April; see Industrial Info's project report.
Meanwhile, subsidiary AK Steel is proceeding with $3 million of basic oxygen furnace rebuilds at its steel works plant in Dearborn, Michigan, as part of a capital improvement program that occurs every two years. Completion is expected in late October. For more information, see Industrial Info's project report.
Steelmaking revenue in fourth-quarter 2020 was about $2.2 billion, compared with just $534 million year-over-year. About $859 million, or 41%, of that came from the automotive market.
"We feel extremely comfortable that our leadership position in automotive is very solid," Goncalves said. And after automotive steel production of 3 million tons per year, "the acquisition of [ArcelorMittal USA] elevated our participation in automotive to 5 million tons per year."
Fourth-quarter earnings of $74 million were up from $63 million year-over-year. However, Cleveland-Cliffs suffered a full-year net loss of $81 million, compared with earnings of $293 million in 2019.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
