Steel Products Prices North America
October 27, 2016
Cliffs' Goncalves: Good Guys Win
Written by Sandy Williams
Cliffs Natural Resources reported iron ore pellet sales volume in third quarter was 5.3 million long tons compared to 5.6 million long tons in 2015. Production was also down at 3.86 million long tons compared to 4 million long tons the year before. The decrease was attributed to customer inventory mix that was partly offset by additional sales in Q3 from a short-term contract.
The decrease in revenues per ton of $73.50 in third quarter was in line with Cliff’s previous guidance. Third quarter revenue was $553 million for a net loss of $28 million for the quarter. Adjusted EBITDA was $62 million includes $20 million in expenses related to idled mines, a $12 million non-cash accrual as a reserve for potential retroactive electric power surcharges, and a onetime $4 million charge associated with the new labor contract signing bonus. Excluding these expenses, Cliffs’ adjusted EBITDA would have been $98 million. Cliffs reduced net debt to 2.2 billion in third quarter and is focused on further reductions.
