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Cleveland-Cliffs (CLF) to Idle Tin Plant After ITC Ruling
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Cleveland-Cliffs Inc. (CLF - Free Report) recently announced its decision to indefinitely idle its tinplate production plant located in Weirton, WV, in April 2024. This action follows the unanimous decision by all four members of the International Trade Commission (ITC) to reject the implementation of anti-dumping and countervailing duties on tin mill products, as determined by the Department of Commerce. Approximately 900 employees will be affected by the move. Cleveland-Cliffs is committed to providing relocation opportunities to other Cliffs’ facilities or offering severance packages to the impacted employees.
In January 2023, Cleveland-Cliffs, along with co-petitioners the United Steelworkers (USW), filed antidumping and countervailing duty petitions concerning unfairly traded tin and chromium-coated sheet steel products. Despite evidence of dumping and subsidization, the ITC's unanimous rejection of tariffs on Feb 6, 2024, led to the decision to idle the Weirton plant.
Lourenco Goncalves, Cleveland-Cliffs' chairman, president and CEO, expressed disappointment in the outcome, citing the company's efforts with the USW to save Weirton and highlighting the challenges posed by unfair trade practices. Despite the Department of Commerce's findings, the ITC's ruling against tariffs maintained an uneven playing field, rendering tinplate production unviable.
Goncalves emphasized the collaborative efforts with the USW and the disproval of arguments against domestic industry and workers. The successful testing of Drawn & Ironed material at Weirton demonstrated the capability of the plant and its workers to meet market demands. Goncalves called the ITC's decision a setback for American jobs, the middle class and critical food supply chains, advocating for stronger trade laws.
Despite the Weirton plant's idling, Cleveland-Cliffs maintains its 2024 sales volume guidance of 16.5 million tons of overall steel products.
Shares of CLF are up 0.3% in the past year compared with a 3.8% fall of its industry.
Image Source: Zacks Investment Research
In the fourth quarter of 2023, Cleveland-Cliffs reported an adjusted loss of 5 cents per share, narrower from a loss of 40 cents in the year-ago quarter. Revenues also saw a modest uptick of nearly 1.3%, reaching $5,112 million, from the prior-year quarter’s figure.
CLF projects a reduction in steel unit costs by approximately $30 per net ton, which is expected to yield an adjusted EBITDA benefit of nearly $500 million over the levels seen in 2023. Capital expenditures for 2024 are forecast in the range of $675-$725 million. Additionally, CLF foresees a significant rise in adjusted EBITDA for the first quarter of 2024 compared with fourth-quarter 2023 numbers.
Zacks Rank & Other Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 37.1% in the past year.
Eldoradohas a projected earnings growth rate of 1,040% for the current year. The Zacks Consensus Estimate for EGO’s current-year earnings has been revised upward by 10% in the past 60 days. EGO topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 496%. The company’s shares have rallied 28.4% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 4.3% in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied 72% in the past year.
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Cleveland-Cliffs (CLF) to Idle Tin Plant After ITC Ruling
Cleveland-Cliffs Inc. (CLF - Free Report) recently announced its decision to indefinitely idle its tinplate production plant located in Weirton, WV, in April 2024. This action follows the unanimous decision by all four members of the International Trade Commission (ITC) to reject the implementation of anti-dumping and countervailing duties on tin mill products, as determined by the Department of Commerce. Approximately 900 employees will be affected by the move. Cleveland-Cliffs is committed to providing relocation opportunities to other Cliffs’ facilities or offering severance packages to the impacted employees.
In January 2023, Cleveland-Cliffs, along with co-petitioners the United Steelworkers (USW), filed antidumping and countervailing duty petitions concerning unfairly traded tin and chromium-coated sheet steel products. Despite evidence of dumping and subsidization, the ITC's unanimous rejection of tariffs on Feb 6, 2024, led to the decision to idle the Weirton plant.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. price-consensus-chart | Cleveland-Cliffs Inc. Quote
Lourenco Goncalves, Cleveland-Cliffs' chairman, president and CEO, expressed disappointment in the outcome, citing the company's efforts with the USW to save Weirton and highlighting the challenges posed by unfair trade practices. Despite the Department of Commerce's findings, the ITC's ruling against tariffs maintained an uneven playing field, rendering tinplate production unviable.
Goncalves emphasized the collaborative efforts with the USW and the disproval of arguments against domestic industry and workers. The successful testing of Drawn & Ironed material at Weirton demonstrated the capability of the plant and its workers to meet market demands. Goncalves called the ITC's decision a setback for American jobs, the middle class and critical food supply chains, advocating for stronger trade laws.
Despite the Weirton plant's idling, Cleveland-Cliffs maintains its 2024 sales volume guidance of 16.5 million tons of overall steel products.
Shares of CLF are up 0.3% in the past year compared with a 3.8% fall of its industry.
Image Source: Zacks Investment Research
In the fourth quarter of 2023, Cleveland-Cliffs reported an adjusted loss of 5 cents per share, narrower from a loss of 40 cents in the year-ago quarter. Revenues also saw a modest uptick of nearly 1.3%, reaching $5,112 million, from the prior-year quarter’s figure.
CLF projects a reduction in steel unit costs by approximately $30 per net ton, which is expected to yield an adjusted EBITDA benefit of nearly $500 million over the levels seen in 2023. Capital expenditures for 2024 are forecast in the range of $675-$725 million. Additionally, CLF foresees a significant rise in adjusted EBITDA for the first quarter of 2024 compared with fourth-quarter 2023 numbers.
Zacks Rank & Other Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Eldorado Gold Corporation (EGO - Free Report) and Hawkins, Inc. (HWKN - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 37.1% in the past year.
Eldoradohas a projected earnings growth rate of 1,040% for the current year. The Zacks Consensus Estimate for EGO’s current-year earnings has been revised upward by 10% in the past 60 days. EGO topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 496%. The company’s shares have rallied 28.4% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 4.3% in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied 72% in the past year.