Cleveland-Cliffs records Q4 loss but profitable 2023

Cleveland-Cliffs Inc., a steelmaking and iron mining firm that also operates the Ferrous Processing & Trading (FPT) network of scrap yards, has reported a generally accepted accounting principals (GAAP) net loss of $139 million in the fourth quarter of 2023.

The quarterly loss chipped into the company’s overall profitability in 2023, with the Cleveland-based firm reporting it generated GAAP net income of $450 million for the full year.

Cleveland-Cliffs also finished 2022 with a fourth-quarter loss of $204 million.

On the revenue front, Cleveland-Cliffs finished with $22 billion of revenue in 2023, down from $23 billion the prior year. It says its 2023 figure was achieved in part thanks to record steel shipments of 16.4 million net tons, including record automotive shipments.

Looking at this year, Cliffs President and CEO Lourenco Goncalves makes specific references to the scrap market, even though the company predominantly uses less scrap-intensive blast furnace/basic oxygen furnace (BOF) technology to make its steel.

“Going forward, and assuming a fair scrap marketplace—free from artificial, provoked and hard-to-explain moves—with scrap demand growing and scrap supply shrinking, there is no good reason for scrap prices to go down,” Goncalves says in comments accompanying the most recent Cliffs earnings report.

“If true supply and demand for scrap in the United States prevails, there is no good reason for HRC [hot-rolled coil steel] prices to go below $1,000 per net ton.

“Steel demand remained healthy throughout the entire year, with our most important market—the automotive sector—performing well. Even with the United Auto Workers labor strike late in Q3 and into Q4, automotive steel demand remained consistently strong, as we anticipated. After it was clear that the strike was not creating any real issues in the marketplace, nonautomotive clients destocking their inventories betting on lower steel prices were compelled to buy steel at higher prices.”

Goncalves says the company’s cost per ton of steel produced is moving in the right direction. “Another very important highlight of 2023 at Cleveland-Cliffs was our success in significantly reducing our unit costs," he adds. "We expect steel unit costs to further decrease $30 per ton in 2024.

“We remain committed to all stakeholders of Cleveland-Cliffs, and that includes our union-represented and nonunion workforce, investors, customers, suppliers, communities and the United States of America. Our relationship with each and every one of these stakeholders is incorporated into every decision we make as a company. Cleveland-Cliffs is proud of being American owned, American operated and a reliable foundation of American values.”