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Cleveland-Cliffs (CLF) Successfully Tests Hydrogen Blast Furnace

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Cleveland-Cliffs Inc. (CLF - Free Report) announced the successful completion of a hydrogen (H2) injection trial at its Indiana Harbor #7 blast furnace, marking a milestone in North American steel production. Following the successful trial at Middletown Works in May 2023, this represents the second Cleveland-Cliffs blast furnace to integrate hydrogen as a reductant and fuel source.

Indiana Harbor #7 stands as one of the largest blast furnaces globally and the largest in North America, renowned for its size and production capacity. Its technological prowess enables the production of high-end steels, particularly tailored for automotive applications, placing it favorably against counterparts in Japan, Korea, China and Europe.

Cliffs recently wrapped up the commissioning of the hydrogen pipeline at Indiana Harbor, a critical infrastructure for the trial's success. The completion of the pipeline, accomplished ahead of schedule, under budget and without incident, underscores Cliffs' commitment to future greenhouse gas reduction initiatives. Linde, Cliffs' hydrogen gas supplier, played a pivotal role in executing this significant trial.

Cleveland-Cliffs proudly embraced cutting-edge technology to reduce carbon emissions while maintaining operational efficiency and product quality. The company underlined its leadership in utilizing advanced technologies, positioning its blast furnace steel among the world's cleanest.

This commitment includes the incorporation of technologies such as iron ore pellets, natural gas injection, HBI, and the latest addition, hydrogen. The company commended its dedicated team for this achievement and expressed gratitude to Linde for its invaluable partnership in propelling sustainable steel production forward.

Shares of CLF are down 13.2% in the past year compared with a 4.9% fall of its industry.

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Cleveland-Cliffs, in its third-quarter call, stated that it expects to achieve a $15 per net ton reduction in steel unit costs from the third to the fourth quarter, with ongoing cost savings expected in 2024. In the fourth quarter of 2023, the company foresees a significant impact on free cash flow due to working capital. Cliffs revised its full-year 2023 capital expenditure forecast to $670 million, down from the midpoint of the earlier guidance of $700 million.

 

Zacks Rank & Other Key Picks

Cleveland-Cliffs currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Basic Materials space are Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and The Andersons (ANDE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% in the past 60 days. The stock is up around 66.7% in a year.

The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.97, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 31% in the past year.

ANDE beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 32.8%. The company’s shares have increased 47.1% in the past year.

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