Cleveland-Cliffs Announcement Delivers Blow to Tin Plant Cleveland-Cliffs Announcement Delivers Blow to Tin Plant

Actionable Trade Ideas

always free

Cleveland-Cliffs Inc. CLF 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.

Price and Consensus

 

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.

Zacks Investment Research
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, sporting a Zacks Rank #1 (Strong Buy), Eldorado Gold Corporation EGO and Hawkins, Inc. HWKN, 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.

Just Released: Zacks Top 10 Stocks for 2024

Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.

See New Top 10 Stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report

Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

Eldorado Gold Corporation (EGO) : Free Stock Analysis Report

Hawkins, Inc. (HWKN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.