Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/1ddfe9dda8a204e0450dbab2cbec2311.jpg)
Cleveland-Cliffs Takes Measures to Weather Pandemic
Written by Sandy Williams
April 16, 2020
Extreme times require extreme measures and rigorous planning, as shown in the Cleveland-Cliffs business update on April 15.
Cleveland-Cliffs claims that its liquidity is assured during the COVID-19 crisis even under “extreme stress test assumptions.” Liquidity in an extreme scenario, not including proceeds from additional financing, would reach a trough of $370 million in September 2020 and improve thereafter. Current liquidity as of March 31 is approximately $1 billion. Cliffs management stressed that it does not expect the extreme test assumptions below to materialize.
Extreme stress test assumptions:
- U.S. automotive plants remain shut down through the end of June 2020
- Slow recovery in production during second half of 2020
- Approximately 6 million new automotive builds from April 1, 2020, through Dec. 31, 2020
- Full-year AK Steel flat-rolled shipments of approximately 3 million short tons (from March 13, 2020)
- Full-year third party pellet sales of approximately 12 million long tons
- U.S. HRC: averages $480/t in Q2 and Q3; $525/t in Q4
- IODEX: averages $70 between April 1, 2020, and Dec. 31, 2020
- Atlantic Basin Pellet Premium: averages $29 between April 1, 2020 and Dec. 31, 2020
- Cash burn rate: averages approximately $120 million per month during second quarter. Improves if shutdowns continue (as fixed costs become variable)
The company has undertaken several production adjustments during the crisis to align production with demand.
Temporarily idled until market conditions improve:
- Dearborn Works
- All Precision Partners Facilities
- Toledo HBI Construction
- Approximately 65 percent of AK Tube Production
Extended two-week outage:
- Mansfield Works
- Butler Works
Indefinitely idled: AK Coal
Production to be idled in mid-April:
- Northshore mine (planned restart in August 2020)
- Tilden mine (planned restart in July 2020)
Additional cost-cutting measures include, among others, suspending future dividends and a 40 percent pay cut for Cliff’s CEO.
Preliminary results for AK Steel in the first quarter post-merger show revenues of approximately $345 million to $375 million, 2.1 million long tons of mining and pelletizing sales, and shipments of 200,000 tons of flat rolled steel. Pre-merger shipments (Jan. 1-March 12, 2020) were approximately 1.1 million tons.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/sandy-williams.jpeg)
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/stelco.png)
Steel Summit 2024: Stelco CEO reflects on strategy, growth, and sale to Cleveland-Cliffs
In a candid fireside chat with SMU Senior Analyst/Editor David Schollert, Stelco’s CEO Alan Kestenbaum opened up about Stelco’s pending sale to Cliffs, his business strategy, outlook for the industry, and plans for the future. The chat took place on Tuesday, Aug. 24, at the 2024 SMU Steel Summit in Atlanta.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/AISI.png)
AISI: US steel shipments unchanged in July vs. June, down on-year
Domestic steel shipments remained nearly flat in July month over month but fell from a year earlier.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/white_house.png)
Media reports: Biden could block USS sale on national security concerns
President Joe Biden could block the $15-billion sale of U.S. Steel to Japan's Nippon Steel by citing national security concerns That’s according to reporting in the Washington Post and the Financial Times that was later picked up by the New York Times as well as in wire services.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/US_Steel.png)
USS threatens to cut ‘thousands’ of jobs, move HQ if Nippon sale blocked
U.S. Steel could slash thousands of jobs, shift away from integrated steelmaking, and move its headquarters out of Pittsburgh if its acquisition by Nippon Steel isn’t completed, the company’s top executive said. “We want elected leaders and other key decision makers to recognize the benefits of the deal was well as the unavoidable consequences if the deal fails,” company President and CEO David Burritt said in a statement on Wednesday.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/SSAB.png)
CRU: SSAB to expand Mobile plate mill
SSAB plans to spend $12 million to boost production capacity at its electric-arc furnace (EAF) plate mill in Mobile, Ala. The Sweden-based steelmaker will do that by expanding the existing furnace there. Shot blast equipment will also be upgraded. The expanded capacity is expected to come online late next year. The mill currently has an […]