Cleveland-Cliffs announces price increases on fixed-price contracts

Cleveland-Cliffs announced the following updates on its latest commercial and operational developments. The company affirmed that, with a large portion of its fixed price contractual volumes already renewed in its most recent negotiating cycles, Cliffs will achieve higher annual fixed prices for steel in the calendar year 2023 compared to 2022. These improved annual fixed prices are independent of the company’s recently announced price increases on spot steel sales. Specifically, with higher sales volumes and a similar mix of hot rolled, cold rolled and coated products, the company expects from its direct carbon steel automotive customers an average selling price of approximately $1,400 per net ton in 2023, compared to an expected full-year 2022 price of approximately $1,300 per net ton. Direct carbon automotive sales represent Cliffs’ largest end market, are performed entirely on a fixed price basis, and are not influenced by spot prices. Similarly, the company has also achieved significantly higher contractual fixed prices for its grain-oriented electrical steels for 2023 compared to 2022, as well as meaningful increases in fixed base prices for its non-oriented electrical steel and stainless steel products, before surcharge impacts. Fixed-price contracts are expected to represent 40%-45% of the company’s steel volumes sold in 2023, and over 50% of total steel revenue under the current futures curve for U.S. HRC. Separately, as a result of lower input costs and normalized repair and maintenance expenses, Cliffs also expects significantly lower Steelmaking unit costs in 2023 compared to 2022.