Lourenco Goncalves, Cleveland-Cliffs chairman, president and chief executive officer, said the first-quarter results are “a clear indication” of the success the company has achieved as it renewed its fixed-price contracts last year, he said in a news release.
Despite the decline in spot prices for steel from the fourth quarter to the first and its lagged impact on results, Cleveland-Cliffs continued to “deliver strong profitability,” he said.
The company expects to set another free cash flow record this year, according to Goncalves.
Cleveland-Cliffs produced 3.6 million net tons of steel in the first quarter. Its average net selling price per net ton of steel in the first quarter of 2022 was $1,446 compared to $900 in the first quarter of 2021.
The war in Ukraine has made it “absolutely clear” that overly extended supply chains are weak and prone to break down, particularly steel supply chains that are dependent on imported feedstock, Goncalves said.
Cleveland-Cliffs produces all the products it needs in Ohio, Michigan and Indiana, he said.
Cleveland-Cliffs purchased AK Steel for $1.1 billion in 2020. After that the Cleveland-based company bought the U.S. assets of ArcelorMittal for $1.4 billion, making it the largest flat-rolled steel producer in North America, officials said.
Neil Douglas, president of IAM Local 1943, was pleased to hear about the company’s first-quarter performance.
“Good news for the company is good news for all,” he said.
He said every union employee received more than $10,000 last year in profit sharing and he hopes that benefit continues this year. He said the Middletown plant is looking to hire at least 200 employees.
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