Cleveland-Cliffs Forecasting 8% Shipment Growth for ’23

Feb. 14, 2023

CEO Lourenco Goncalves says demand from auto makers should grow steadily during the year.

The leaders of Cleveland-Cliffs Inc. expect their shipment volumes to grow at least 8% this year as automotive customers ramp up production.

Speaking to analysts after Cleveland-Cliffs reported fourth-quarter results, Chairman, President and CEO Lourenco Goncalves said the company’s January shipments to auto manufacturers were the best in nearly a year and added that he expects his team’s numbers to grow steadily throughout 2023. In all, Cleveland-Cliffs executives are forecasting shipment volumes of about 16 million net tons versus 14.8 million in 2022.

Combined with better pricing—recently concluded negotiations will lift the 2023 per-ton selling price about $115 from last year—and lower operating costs, that will also steadily grow the company’s bottom line. Cleveland-Cliffs posted a fourth-quarter net loss of $204 million on revenues of a little more than $5 billion. In the last three months of 2021, the company had booked an $898 million profit on more than $5.3 billion in sales. Input costs were the swing factor in late 2022, growing by more than a quarter from the prior-year period to $5.1 billion.

CFO Celso Goncalves told analysts that dynamic will shift back in his team’s favor this year as it aims to lower its overall cost of goods sold by $2 billion. Lower capital spending of $700 million to $750 million versus $943 million last year as well as lower energy costs (Cleveland-Cliffs should spend $300 million less this year on natural gas) and pension plan contributions also will contribute.

“We are already operating at a much lower cost than what our recent [cost of goods sold line item] indicates,” Celso Goncalves said.

Asked about the things that need to go right for Cleveland-Cliffs to hit its full-year shipments target, Lourenco Goncalves sounded very optimistic. Pointing out that auto makers will buy about 5 million tons of steel directly from the company and another 2 million tons via processors or service centers, he said the rest of Cleveland-Cliffs’ business unit need only hit their 2022 numbers to get the whole company to its target.

“I don’t think 16M is any stretch,” he said.

Shares of Cleveland-Cliffs (Ticker: CLF) were down about 2% to $19.75 in morning trading Feb. 14. Over the past six months, they are up slightly.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.

With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.