Lourenco Goncalves, Cliffs’ chairman, president, and CEO, said during a conference call that the company’s business model is based on a significant amount of contract sales.
“Differently from other steel companies more exposed to spot prices, we believe that our average sales price next year should be higher than in 2021, allowing us to continue to grow our already strong profitability and to further strengthen our balance sheet,” he said.
Cliffs this month agreed to acquire Ferrous Processing and Trading Company, the leading prime scrap processor in the U.S., Goncalves said.
He said the integration of FPT into the company’s footprint as a premier flat-rolled steel producer should allow it to utilize more prime scrap, further reducing its utilization of coke and carbon emissions.
The company plans to close this acquisition in the fourth quarter, he said.
“This is real growth; profitable growth; environmentally friendly growth,” he said.
Also in 2020, Cleveland-Cliffs Inc. bought the U.S. assets of ArcelorMittal for $1.4 billion, making it the largest flat-rolled steel producer in North America, officials said.