Cleveland-Cliffs Inc., a leading company in the steelmaking and iron mining industry, and operator of the Ferrous Processing & Trading (FPT) scrap yard network, has announced a net loss of $139 million for the fourth quarter of 2023, according to generally accepted accounting principles (GAAP). Despite this quarterly setback, the company maintained profitability for the full year, with a reported GAAP net income of $450 million.
The company also experienced a fourth-quarter loss in the previous year, totaling $204 million. In terms of revenue, Cleveland-Cliffs reported earning $22 billion in 2023, a slight decrease from $23 billion in 2022. This year’s revenue was bolstered by a record number of steel shipments, amounting to 16.4 million net tons, including an unprecedented level of automotive shipments.
Lourenco Goncalves, President and CEO of Cleveland-Cliffs, highlighted the scrap metal market in his commentary on the company’s financial outcomes. Despite the firm’s reliance on blast furnace/basic oxygen furnace (BOF) technology, which is less dependent on scrap metal, Goncalves emphasized the importance of a fair scrap marketplace. He projected that given a balanced scrap market with growing demand and shrinking supply, scrap prices should not decrease, potentially supporting higher prices for hot-rolled coil steel (HRC).
Goncalves also noted the robust demand for steel throughout the year, particularly from the automotive sector, which remained strong despite a labor strike by the United Auto Workers in the latter part of the year. The strike, according to Goncalves, did not significantly disrupt the market, leading to increased steel purchases by nonautomotive clients who had initially anticipated a price drop.
A key achievement for Cleveland-Cliffs in 2023 was the significant reduction in the cost per ton of steel produced, with expectations for further cost reductions in 2024. Goncalves affirmed the company’s dedication to its stakeholders, including its unionized and nonunion employees, investors, customers, suppliers, and the communities it operates in. He expressed pride in the company’s American ownership and operations, emphasizing its commitment to American values.
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