CLF - Earnings call 4 2023 | Cleveland-Cliffs Inc.

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Operator

Good morning, ladies and gentlemen. My name is Melissa, and I am your conference facilitator today. I would like to welcome everyone to Cleveland-Cliffs Full Year and Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]. After the speakers' remarks, there will be a question-and-answer session. The company reminds you that certain comments made on today's call will include predictive statements that are intended to be made as forward-looking within the safe harbor protections of the Private Securities Litigation Reform Act of 1995.

to that statements statements and are could actual believes reasonable based uncertainties company cause such assumptions, subject results the its are forward-looking on that Although materially. differ to risks in with available could website. Today's that conference the clevelandcliffs.com. XX-Q differ set XX-K results Important and which at reports releases are factors Forms filed cause on news company's also being SEC, materially broadcast call to are is forth the and on and available it will available call, archived the on and the At conclusion website be for the of replay. certain The company results discuss will also special excluding items. found Reconciliation yesterday. At the for Regulation like Executive G purposes I Financial time, and release, can to published be Officer. was President Celso Goncalves, in Vice which would introduce earnings this Chief

Celso Goncalves

Good morning, everyone.

to our process, briefly forward. Before priorities this start our discussing I'll our recent allocation in sale steel call strategy addressing XXXX and U.S. then M&A going the clarify going I'm capital involvement by and results,

on as week. everyone's so Steel the last referenced Cleveland-Cliffs in is filed U.S. statement Delta Just proxy in company by page, D same as the

QX On QX Steel to intention entire the close sell their Steel announced transaction and to U.S. Nippon the by December to company of XXXX. expectation its of Japan XX, XXXX, indicated or

U.S. process review few clear transaction of faces As many U.S. And uncertain recent to Sachs. low level regulatory their Board, when these closes. a just done deal make close. a we advisers now, management very Steel customary the team, were it their is was deal as at of all their at severe brief Barclays having Wachtell a lawyers made A a characterized that and with Goldman and financial path by the Millbank risk." announced and it that CEO Nippon their Following reports Steel only "a know by by misjudgments

So their not over. it's side,

we an bought twice closing in other involving white and when are which which upsetting AK the USW unions a processes. of transaction steelmaking and AM USA, completely predict. only did is cookie-cutter certain practical We it experience the are recent of and with in acquisitions are one and assets. Cleveland-Cliffs successfully black involving represented was company implications USW company forces than different labor XXXX sale of iron represented whole M&A animal deals of the not a and was Labor hard acquisition assets. to agreements unionized Steel

Our included $XX from final benefit we track that The $X act We in on cash, stockholders and involved. all a total a value that record per proves stock $XX opportunistically Cliffs over in deals. and value for synergy CLF proposal combining execute $XX value-accretive close U.S. stakeholders Steel U.S. over of to share. acquisition fire Steel transactions to in

The the willing reason can million deliver of offer the value industrial were synergies. Steel There's for acquisition. a combination this that's we and $XXX logic in main saying, goes Cliffs other without U.S. no to buyer that cost

offer and combined best Our the in for investors upside the future provided value company.

the final chains to No company a sale antitrust the and offered remedies and transaction. support clear path awareness a foreign value. U.S. deal with Steel proposed But of risk regulatory still market Cliffs, competitive proposal security. included to the overestimated ignored to antitrust interest buyer completely close our also union with supply than environment. announce the mitigate a union lower for of conflicts Nippon and the with Cleveland-Cliffs regulatory negative overall preserve to risk Our the with a implications America. political serious national miscalculated the risk towards for or clearly a even to rather chose Cliffs, given from the working adequate U.S. and

continue to we be down and this, planning going what to to debt. always allocation capital going we're on and to opportunistic shares, We're forward? going do of all to do paying be is to Cleveland-Cliffs going M&A. M&A back exactly given So be We're what do. going about buying We're

than We debt the In used by cash our we more the free in end more when stated We was $X.X flow billion free quarter below XXXX, billion net XXXX, year-over-year did of most $XXX to actually million debt we as which $X.X fourth than this of cash target higher. year, generated in alone. in $X XXXX adjusted to of of our of nearly only billion. $X.X generated cash XXXX our came EBITDA in bringing down pay last down flow, billion

flexibility toggle front We the steel of market, have as to can priorities needed allocation the a balance based sheet withstand us. volatility capital giving on in in that us opportunities

now, to presented program. share we in plan have our our $XXX the buybacks, And even on existing we repurchase discount aggressive plan million to still We with remaining given be market share stock. in For and of the over free conditions, of more are remainder will this other depending we trade buy by window And have stock our MMPI, continue today, tomorrow. With dry and we we powder as reduce no to said, debt. our as net open that soon as also during the and to way, the windows. opens deploy

X we of allocated have Over roughly repayment. years, debt our XX% to flow past free the cash

buybacks M&A period, opportunistically. reduction priority this #X was capital share opportunities During debt our allocation and with explored

priority. the buybacks #X share are forward, Going now

$X.X our of has We liquidity our our a accomplishment notable ABL. paid highest history. the brought the company's that balance off This level have already billion, above current entire is in

specifically We via From another automotive ton $XX market was repurchases by Our generated and an debt the be per Cleveland-Cliffs. billion standpoint, operational open costs industry. adjusted now and EBITDA. to and XXXX executed We XXXX in delivered $X.X both bond shipments, reduced record in year primarily for total redemptions. blockbuster reduction will in

Precision reported standpoint, of of EBITDA generated and in cash tons X impairment alloy that million increase quarterly small noncash our that million a reductions. EPS capital we $XX foreshadowed GAAP source which In working was in known compared agreements, successful expect cost the in in company free in onetime $XXX gas affirming believe small to as prior acquired value operating XXXX, related We important reported Based supply achieve note this inventory is adjusted million flow, healthy in meaningful EBITDA and adjusted negotiation before which a and them below noncore our rates, to of purging XX-K. QX. From lower we adjusted quarter the capital of XXXX, generated our we write our ton just had as Steel XXXX shipments continued million another XXXX. trough had roughly coal consecutive for the that of cost and of commentary EPS revised hedges AK QX. With to higher higher off to cost in the forward. to a previously an per it's out tooling Partners natural decided would rates, these from XXXX, for we EBITDA goodwill our we on related stamping discount we equating $XXX us those and priorities which going bought quarters level. to a in be all goodwill fourth fourth The both X noncore cash quarter business, above backs We of figure adjusted in were EPS $XXX we reductions to assets

that $XXX our to XXXX remain far at year. I and with outflow amongst XXXX million very would capital the note is in any capacity. expected our expenditures the an this full as no similar million in for of lowest equipment good levels Our plans by should to shape peers with add $XXX

from Our for a DD&A million, decline projection $XXX XXXX. XXXX is about

in small decline also should a some actually expense million, fixed around to same the other XXXX, and promote automotive from should as due $XXX remain be which margin SG&A pricing expansion costs. ballpark lower Our our Furthermore, XXXX. our should contract

to website investors. uploaded for the that you earnings an we Finally, benefit our our should presentation note have of

be don't to go a we find believe highlights. While to the you slides financial call, our materials through the helpful during reference that will plan this we to

plan Going forward, this presentation it to each turn will we that, quarter your for convenience. With to Lourenco. I over update

Lourenco Goncalves

today. everyone and Celso, you, to we this call Thank welcome

accomplish pleased We able were are with what XXXX. very we to in

now of. million what Our of clearly operations demonstrated are capable total XX.X shipments our tons

XXXX, able furnace did in with million true of our steel For demand tangible shipments. configuration. with the recognized have charts blast one was the only COX success, to the proud in BOF into using low Cliffs that our to was the that in also And last for real the the successful roughly H full basically Cliffs several now. I'm as current first H, the green XX.X premium route surcharge we the furnaces. for the pleased year than off reduction, emissions This entire pricing implement actually of of a tons achieved able were for right exists that produced competition and the monetarily be which in implementation to through feedstock us were the years. only more operating the we XXXX the this are we steel we reference, have which we automotive under Even steady With marketplace. we price year, gains HPI way environmental despite to applies marketplace. over blast is hold With

Going progress on hydrogen. the of forward, decade we over expect a lot next emphasis with

Indiana hour an over the the success. day. The pipeline years have ready. in late Energy #X we Indiana trial. We Hemisphere, preparation week, second blast trial Friday, hydrogen into the Department largest from great yesterday initiated Indiana is resumed with build at to for Harbor the hydrogen on be a furnace of injection Western our when at blast gas million initiative. site hydrogen X And hydrogen HX the to for XXth, inject trial in continues The the for On built in last furnace, today. furnace pipeline $XX most we we our deployed of blast the injected #X Harbor The hydrogen hub

well the and a the works the Department and Congress. game other with reductant our is appreciate green of metallurgical event efforts production, control, green closer standpoint has due in have in to revolution. that's to production the got country it's steel with emissions important support The the the by of partnership are iron is making, We support in hot making partner to world quality with becoming very Cleveland-Cliffs abundant to anyone changing very excited COX far several for and as green true the else we on cabinet offices furnace process first hydrogen well. of than emphasize blast metal [indiscernible] the States level and Cleveland-Cliffs industrial the We as very pathway results priced as available have from steel. Hydrogen administration, the Energy United of real positive so and competitively hydrogen to the that

also these as our gas in this grateful for are We to efforts. are. partnership Linde, Linde committed we remains technology supplier, our with as

furnaces blast steelmaking to and produced BOFs iron when than makers. have in the to China is and the technology emissions Speaking COX Japan, of similar associated Said America in making point, superior steel of compared Casing than none of Cliffs XX% to COX the additions through better are another technology, XX% intensity XX Cleveland-Cliffs. better steel emissions the profile world equipment way, Korea, steelmakers or foreign None. top Europe.

better than one margin. of each a large by them We are

our numbers are and "decarbonization utilization been quality have feedstock reductant. Our innovation, steel. gas doing with we natural blast Cliffs brand and Cliffs time long because United things are in of States, the pellets, our strategies" In far and ore a hydrogen perfected. furnaces is have used now better ahead. Their HBI technology is for unanimous the injection. so-called has technology at use The

the recognize We the and that. OEMs benchmark are

to to stays be edge Our technological technology got continue the on reputation up will us. that advantage cutting our we with ensure and this

metal the touch the course, to market was increases United pleased frame. time months implemented we in our more the been our it particularly United prime In than past announced After ton, see decade once over the ferrous in is of than scrap price for in X United the now the averaged company, the XXXX reality The States, are, after that scrap our is strategic higher each States number very average. in has of the the price mind, scrap. entire to ongoing that inevitable clear XXXX, the a in for very prior all successfully about August-September to with broader rest tightness the here increase valuable, gross years, particularly $XXX world. different the of several nearly decade us moves lost and scrap last As is basis owning scrap of the underlying from $XXX steel again per the States. Keep market Bushland market, FPT in over in the

this the have natural than XX% been dominated prevail November the cyclicality power HRC of prices in to of the for working of serious North lot seasonality by of lot an therefore, of for is these demand industry Here, self-inflicted and by a artificial of we DIFs strange of of caused to uses steel scrap allow extended forces important were ] and of A production Once scrap. this America is more Since finally scrap. we a couple businesses [ mega XXXX, FPT and of can resolved, buyers and transacted. will stable of eliminated X time. in acquired supply be settling issue periods called is be instead ways,

holders, are Finally, us as also well Keep in offer. stockholders other it's in deliver they are prefer public, a stock to they for company, cash value Delaware mind, major an U.S. told share we our prepared bidder their with major per now shareholders. are and stock structure $XX.XX Steel a all-cash any and excess over that were of they major of

to company. Unfortunately, were superior way foreign any value U.S. what a fully stockholders our deliver Ohio sell in clear confident speak to proxy risks. their of helping and the we are frequently. we regulatory was very entity. on to our analysis the could risk, statement, Board, stood in sustentive with And antitrust the were because is they the We based a written them not to strategy And in we still despite

only Steel There industries disappointed truly good particularly critical American exclusively not security and American our unionized is to It's supply the proven are Cleveland-Cliffs the bid. chains. American our to right one to to of to and just and manufacturing employees, but our maintain national us workforce. We assigned the U.S. for to ownership reason USW grow commitment backed jobs middle-class preserve jobs, good the

this review Directors Union related and deputation completely severe risks rights. We written. It's overrated they has The and underappreciated evident for related do to of to Fortunately, regulatory believe risks too story the not the of we made the the for [indiscernible] the Board very chapter been proposed USW Along workforce, transaction. now on CFIUS been the US and their of at has they eye, that that final the antitrust miscalculations. Cliffs Steel bad expressing the raising clearly officials proposed of views. bad this on [indiscernible] We alarm representatives, American transaction rightfully as house applaud believe at workers. being influential and this bells for elected with sides contractual America see with for both the Senate Nippon

to promote and continue by hopefully for to industry, be we shareholders unify miracle. single hard the With a the all for we opinions will rather the error As why time, moment At than this part, it's Q&A. the Westell fight was seen and the out our that, for fixed able would know, mistake Republicans. I'll to That's to will workers. company, that point we this later. From positions our for our over believe it American our miracle. Well, and turn earlier Melissa subject that in Democrats Board of made be of the Directors can it a as unforced

Operator

from [Operator Lucas line with Pipes Securities. the Instructions] Our of first B. question Riley comes

Lucas Pipes

steel your moment also a the back gave gives synergies wanted what having comments would appreciate clear go requirements to to while you I to or to divestiture just you to ago, meet potentially ask antitrust, -- in confidence perspective. U.S. your really Lourenco, the

Lourenco Goncalves

the of sufficient Yes. the some regulatory to works. to authorities We pellets a of in division the we than labs others, believe with on were more -- package have our clear based billion [indiscernible] included do the That [indiscernible] other discussing package how would and go a our commitment the commitment be works, of that that sell we hurdles, to a level had divestitures bank knowledge agreements our it way commitments to and that we all sell to -- all antitrust should DOJ homework revenues. the would up done DOJ on others, to supply we $X to

experience hurdle had together, And we of by even Unfortunately, working was to discussed It it discussion. we us. a our terms internal willing never record, just -- partner led Millbank never the our the was even never was had deep were with billion internal in never we willing revenues was $X by partner discussing of us. though for in a with [indiscernible]. an revealed an way, It discussion

conversation, had the that brought would to easily if So down. turn we they it

confident get done if we clarify the left, they home I center, need names political what was administration So the very don't very, on the you all did. the know work And support the say ignored. names, we the and and right, before have to are had have the that eminent, totally on do it. on to We from the and political we figures on we from and

And absolutely see, you stay saw. -- you we'll So put. you point, this have what at

talk about synergies. to Forgot

We USA. You happened know over -- acquired the when is synergies. how AK happened we what deliver. promise and usually operate with That's That Steel. we we what under ArcelorMittal

of do bigger scale. we, at we point, So this the enough more still be same, just

from would very terms the anticipating go would would that synergies and and of from bigger single footprint that negotiate we worker of letting background, health down were more kinds in a any any union of our of stuff footprint. And a So to care ability plants lot renegotiations, having come good will math. [indiscernible] any not importantly, not broad be all that of that much employee, for purchasing, services come more Cleveland-Cliffs type single at shut facility out

that not would be jobs. So cutting

elected said, had in So on go I'll robust leave different I at XX, [indiscernible], December to a [indiscernible]. a direction, that, and proposal but they like we

Lucas Pipes

for buybacks, flow the returns, formulaic flow moved percentage of meantime, capital In of a color. sector cash cash available I in towards appreciate kind free example. a to many allocating to companies the approach that with have strong

prepared percentage, towards reduction towards kind if I X on to mentioned be and a move allocation, of M&A for example, you wondered of buybacks, areas color capital buybacks, but as You would debt your appreciate earlier I opportunistic would this. of kind

Lourenco Goncalves

Look, let one. this Go I'll Celso answer ahead.

Celso Goncalves

not allocated was XX-XX we've aggressive debt point, stated, place cash the with to reduction. free do be estimate going a at There available flow in reduction. share to think But is of and a will to more I yet. We that be a going example, M&A We're debt is don't as -- What XX% So prior for forward quarters, we've to sort we lot we're want of because including going it of putting going we're you flexible. flexible. to is the remain about of we're the buybacks. one are And story sort December. that over that this dividend reason be opportunities buybacks lot announced in in can

I be think and So enough present staying themselves. if toggle this to split, with able it quickly flexibility XX-XX us to move priorities the gives opportunities

Operator

Our next Timna question Research. comes line Wolfe from with Tanners of the

Timna Tanners

I wanted could, the that to arrive the sorry, just that clarify forecast. or we at some EBITDA of how if can color -- XXXX you use guidance I gave, to

stronger your little think forecast. you a comment the a about the on pricing little for volumes talking shouldn't prices color futures, about we could and well side, then per why hoping bit I think below we net basis. X,XXX on own I obviously, that. But ton use more was could you're So futures given the a have of go costs And lower the $XX below market on

on the little $X,XXX. a comment on making on on just numbers have right those color outlook the and sure on also future my thoughts more your the I So

Lourenco Goncalves

are they you differentiate sure futures. The guide by and from hot-rolled futures other, that planned they desks Let are coil, with for cold-rolled [indiscernible] it's future coil, that. cannot the coil, galvanized still that know are the one start because me --

down do consequences. with and $XXX they in go So they a And up day. per $XXX, that ton no absolutely can

futures. on opinion my that's So

a rolled every It's You sell, the because thing producers about deal as paper. have you we we -- the thing. And produce, with and use lot can a than That's future of future few the hot useless. day buy, in we we the transact, more know future. we basically, we that country, the we toilet

see again. we're from then forward. to be going like be And Employ Timna. I wall. you. going things yourself yourself, talking the about okay that. on pricing to They're potential reset with not Look [indiscernible] So going

ton million. as XX.X multiply the is shipments talking the if far basically As about, to XXX million EBITDA of we get that per $XXX million guidance, EBITDA $XX x tons are XX you of

to So XXX number. up that's the I'm million, rounding

Timna Tanners

Got it.

people Okay. ask That's I at. look futurs is helpful. just tiny. Yes, to I it. It's something get about the wanted just market that.

clarify to Just last... on the

Lourenco Goncalves

people like a stop to be looking would the stop talk I good, looking, help, easier they need people good we would you like you're that to because life because like sure talked knowledgeable. make And start. People that lot good, is if a if

sucks. You that know thing that

You that thing is know useless. that

thing every things. by newsletters just that fair as know constructive. doing of people you. ahead, There's us of a wells to lot to Go It's understand a that, for not sell money. that is about let's day. business I'm destroyed make use But time community things these You are destructive, interrupted thing being is absolute make thing the useless. the a to it's for money please, And constructive. that that it's sorry, It's Timna.

Timna Tanners

No, that's leave Lourenco. it okay. there I'll

Lourenco Goncalves

the serious. It's Don't forget resetting about thing.

Operator

from comes with question next Exane. Gresser Our BNP of Paribas line Tristan the

Tristan Gresser

is question to some the remarks, prepared scrap on mentioned and market. refer market first In settlement. moves your probably artificial The you scrap January the in the

the call think be would on keen think what you you question. happened? do you I be what to market to my happen first fair? in your to have need what And view So That's

Lourenco Goncalves

January answered scrap. a that's already scrap. with your that market with under thing. under the prime own is you prime Why Yes, In is clearly supply Yes, question. supply

the will now all in infrastructure are things that going that [indiscernible] view, and few see. these IR, is in Manufacturing the on Manufacturing they right initiatives bear in United last years, Let's States is the cetera, iron way is shrinking. the mills fruit scrap no There's capacity get prime don't mills future. other the to happening are [indiscernible] mini to to with produce the shrinking. build capacity particularly With own manufacturing same time, and generation mini continue At the there, the prime that shrinking, of assets. ore et scrap.

use so metallics use they prime can't they have scrap. to So up and of of substitutes, enough

scrap just has And because yet. What's is scrap shrinking is not to up. of prime increasing. the started and for the grow demand shrinking price is trend the the is manufacturing So

can't we Ohio, the it in like and trade January a The we only numbers not already identified were one trade happens that [indiscernible]. because to drop So were one just numbers. There's trade. how happen the The that was final have a in numbers have the initial one was goes. initial here attempt

what's So the solution?

Just supply again, work, thing work. demand demand country and let and this to continues supply time is time Because if of happen and loss. this doesn't a

make cannot direction You to want. prices in you go the collude

You're going to have real competition.

You're letter going to have you the forces because hope will I my the of supply that's and support. understand demand what point. law the prevailed of

Tristan Gresser

very clear. Yes. second my the is premium. the on That's question And surcharge or

I you've in the surcharge successful think implementation of mentioned the the contracts.

is volume the what involved in previously is your move of mentioned will corresponding believe terms And those you carbon and premium, intensity? BF/BOF. think down I what you for further $XX carbon in I intensity a for So premiums?

So do or in stable you believe XXXX? this premium could it increase with be time relatively should

Lourenco Goncalves

$XX to yet, but has compliant. pay point should some The number. will that's all [indiscernible] steel, it's the automotive the our and automotive they be and per the at will applied but to for example, car. also desire this It's car which Yes. be haven't that assuming our pass of only that of have is need that a it environmentally of In for stable, the get easy them [indiscernible] and car, for clients to along, to surcharge XXXX, outside be clients for, started not

in not of will scheme that. big significant be it the So

tons, And why multiple significant tons, our spending not with time number we're million good being So X of right us what inside we're gray a all the a have have this metallurgically, today, will reductant are have, let's but available, with that make automotive enough for we don't hydrogen that's which we now. call to with next is be proving of in discussing irrelevant. when sure trials call. The step millions as and hydrogen gray works That's we our the contracts green hydrogen furnace, hydrogen what it's hydrogen. done blast

right are track. the that to We are proving on ourselves we

meantime, our COX Cliffs hydrogen going on we the is green, to pink, that are we We natural enrich to emission. using, the hands are get And that of our a are reducing COX level use technological But very we report, can prove to around when aiming and can any H to H. we higher have are we right any And world available, we going track. that really to that hydrogen to level. In gray, surcharge the to excited Cliffs at we are to positive emissions type is gas, green that be the of we a going the consider for we due when that hydrogen, we're get Max green are would can what the hydrogen. Cliffs the than start can to numbers to whatever be sustainability we go use have H in we

talk brag route the and get have this to but to away thing -- that X what talk going, we're to paid, several but know not natural go be in to like hydrogen day when right want about bring to it doing So be We're HX. [indiscernible] need of hydrogen, to use you enough XXXX. the expect that's expect years in get summary, the to are going hydrogen about to fully about they they And Cliffs we in have to enrich even we we're H to they're we gas, they CEOs now the don't going but before -- we is anymore, at $XX when next talking. but per environmental don't available which just go to they ton XX.X% this Cliffs the

Operator

Our the next Bill question Peterson line from comes with of JPMorgan.

William Peterson

First question, I wanted your to kind of and come the back fundamentals to outlook.

fourth of have like year looks April. pricing steel customer coated compared think you inventory year, if market, could given given we quarter? value-added was as March, the first in in view you're down later quarter, mix, current to about maybe then you product may then specific year, the it on strength which the bit the the you the products steel see think last for should peaked or little the HRC and And step we if volumes a touch we So that the the relative in how this seeing during as think it, about already

Lourenco Goncalves

the will all great. are year. stable first an last the everything what fine of Look, and okay, is end seeing seeing we're we and Remember, expecting that all, soft terms pretty Armageddon sudden, inflation catastrophe were was Yes. of last Everything over, the will and landing, of year, in the first comparison expecting was to in world quarter was come a landing. hard the we with our everybody take

the that supplier building the strike -- they strike and or not Detroit, thing inventories point as thing for the that then included the U.S. major Big a the was Three automotive this Big Because the a a actually was on common other was Army called The continue in us as as last anticipating, in long that bad Three good were were anticipation year they that as even of not in supplier car-manufacturing the to of strike to factors Detroit. buy.

last -- expecting a the So centers service buyers, that affected blank particularly And the then of distributors buy that the strike the mildly sector not buy. what entire the But disaster were anymore, when happened of middle when and [indiscernible] down. prices, and anticipation entire the year. that's prices last goes UAW And we're in very impact they sector the the the was go on of in demand man, the the does very particularly stage. behavior only end biggest strike tail of the was strike other at

are this point nothing like that We at will year. that you this happen anticipating not

anticipating day, a year tons are year, million of more no we last expecting the year, end basically in XXXX. year million XX.X at flat in stable, why So this much mix. more shipment, in tons of XX.X a much we And a normal change that's the terms are

William Peterson

mix should And how quarter, for we the Yes. this mix? first think your own about and

Lourenco Goncalves

time. I'm you sorry, it can say one

William Peterson

Yes.

Just the second given business part last volumes the how the of into mix my in in question step think the about to was for coated first quarter product down quarter. your the

Lourenco Goncalves

Celso. ahead, Go Yes.

Celso Goncalves

first on Some general the quarter. talking points

then and benefit big can lower increase index as an be a not average on QX. coal, probably we In a slight should start a until materials from going but QX hit from a of of QX. we're costs, terms similar things to mix from to mix, that's like $XX price And selling and QX. have see around going terms From pricing standpoint, to shipment should to plug raw QX in lags you And in benefit that. see ton then you a relative increase standpoint, from

So those you are QX kind of the general that think about. estimates for can

William Peterson

shareholders That's I something your the as realize deal to like and -- But views capital go deal well return is your Cliffs should pay is NSE see to deals? the as through second electric capital would U.S. need realize in debt current bolster look, I technical assets down, you maybe for so, what kind anything or And clear. but helpful guess, to color. the for footprint question, capabilities would to to to return look downstream moving your else? improve of the plan If my on compete forward. require order

Lourenco Goncalves

footprint. we the need have see a that fantastic don't So anything. do believe we to We

feedstock own and our destiny. position fantastic terms in a our have our to of control ability We

we do continue So but build need we opportunities. to think to are see they to ahead. Technologically, anything, don't we

did sell ahead. based month happy in anticipate. But is see with a recognize to what to cost crazy a like company to are full years, stock. years, But we that someone then I hand. they point could not They then was else just made offer union. And would forget, you job down one. by that a nobody XX the years. a Board steel every a built back paying cash need big bring them buy Cliff my to to them better to [indiscernible] a market. [indiscernible] big When on target that they we that for house companies offer good to on that Steel. of than some you cash with the do [indiscernible] X And doing. hand. trade U.S. on everybody team and keep And want quality, was believing the don't completely here. And off type pay bring and Steel things on In the That's be what is I underappreciated paid and are That's are investors because done, that. U.S. we we the got the and why that role management we in That's agree did with them. Everybody on fundamentals to will It's not on X a that debt an based of would to like mortgage, that there. the terms of XX years

breaking Let's back the workers. And one and had talk it in against Turkey mind, America. back here, United of a workers the that labor of unionized Steel goal the unionized in back make of am United Steel supporter big was the that to need the These by of go. [indiscernible]. management of break because Board and team to labor the like goes people bosses to the type goal I

take I or to on that's give color need my more Do that's Steel. enough? U.S. So

William Peterson

No, that good you what no, your it's and to clear you compete. have -- that's need

insights XXXX and in the the good here ahead. appreciate I luck and So execution

Operator

comes of Citi. from line with Hacking Alex question next Our the

Alexander Hacking

just I So one have question.

do that, cost you Could realistically On guidance, Any XX.X at volume on relationship reduction there tons? million You're helpful. color that million achieve cost tons. the that $XX would ton guiding you right? a achieve XX what need level to be to of

Celso Goncalves

that's to reduction going the the -- but continue not at of Yes. the Alex. to We've achieving like XX.X% given see -- throughout last that lot come you're going We're cost. I with. volume go year, need It's we're cost and we be we the over have. going in reduction we that's whole what more That's year what XX.X% to we're a bit we're few lower necessarily going quarter, still what done this to during We're we're assumptions year. assuming, at that sticking to last to there's mean our a confident year. said, quarters, cost it's that but little to next

Alexander Hacking

Okay.

kind Just [indiscernible] cost ton scenario? Or volume, achieve flattish let's would reductions? more say, was be per XX able costs see we to of million would in tons instead, any that you

Celso Goncalves

Yes.

lower that. and like expense have things could probably less talk maintenance with that what volume, So we things are we there

So that would offset the volume impact.

Operator

Our Pipes with next Securities. question is B. a follow-up from the Riley line Lucas of

Lucas Pipes

if I for tranche. expectation shaping any the January basis? pricing fixed you April of contracts could how ask, was and a also share on on wanted the the for then to up kind And year-on-year first, that

Lourenco Goncalves

is we price in increase Yes. cases. still transacting at And are the level announcing The below. the some that last overall market we're

So it's a bag. mixed

best more push thing is always higher for the able until prices. try shareholders. for like market a we company for that -- we reached our best one all our point realize the employees, to going more. the So our to any has best that thing we That's be thing the are not We

why up. until more. that's pushed we we prices So go We go no can

other and any being that for lower the in cost in this fundamentals With the see reason is On around hand, we -- and marketplace, to around very important. one you come back all to thing be go price the and don't price around scrap. to

enough. So I have already discussed the scrap

point, So And floor. is good at $X,XXX say my $X,XXX is ton a talk. I per would that this the

the that's that going to expect HRC as far price So transact range I as forward.

as great we Big are decent have in that the to with April against that be relationship block we [indiscernible] Xst [indiscernible] this Three. other, April, And at They by in on clients a margin As used automotive called far our a client Toyota. us. largest biggest that the point goes the for

other steels. electrical to Steel good other steels. getting particularly highly we We we Nippon without our this still to more-oriented just that at is that continuing They steels Steel price don't increased a are bigger. more-oriented the sued clients. the switched about just electrical Toyota point We're say And electrical we Nippon specs price increase. like suing Toyota, get in big, develop And [indiscernible] more-oriented did produce to because are producing but Japan. in never with thing sophisticated really

technology. States, would United So we bring if that's We the know relationships to technology that how the they to work. that like don't need

Lucas Pipes

use what's volume ratio exposed? pricing light the in good more of of to fixed for versus guidance, And kind spot a strong

Lourenco Goncalves

XX-XX is a good number.

probably XX-XX. in the are We

color we're close the more any XX, don't to So know has if I Celso that. on

Celso Goncalves

-- think that I about way a that's yes, think it. No, good to

Lucas Pipes

from a market scrap of on into points side. When going then the the do back Or do major of I than U.S. at the I you higher the HRC price imported dynamics, I square And quoted today? steel and how $XX.XX, houses. math the publishing imports obviously kind the would How frame landed is arrive appreciate by which U.S., to you that? the where is up competition on

Lourenco Goncalves

your I'm I sorry, not sure I'm question, Lucas. if understood

Lucas Pipes

When I I import the arrived an math, at do price.

And a makes requirement given the steel. import the someone U.S. the the price on surface were if at buy than it's to that little -- you I if that's sense given steel higher So today, short from still price. where HRC is a that abroad see U.S.

that kind you of view if price imports wondered on currently I the into So where a factor have and discovery.

Lourenco Goncalves

coming still all news. we from is blast Yes. furnace all, The the coming importance that, first United talking when existing it's about from abroad, in is abroad were BOF it's volume of by biggest States. in thing of [indiscernible] and still coming from large, The integrated mini still type and

influenced by able of China export are the no Korea They Europe. or big super whether or that matter Japan about talk steel its price you when to our producers or from are ore. So of

above something like -- no a trade last calls several should is us, that's used are. remember calls our than of ore ago discuss my later, these when lower now $XXX, important So exactly a that [indiscernible] years to lot in exactly few said for $XXX. I we that That's I Bingo. still years the where one that. was we

you out have box that having put biggest they're problem ownership that prediction the for here. to trade a pick I foreign is there's not described, of play. in to reason very the going trade don't States I'm player the to be So It continue simple. the the And is the and is we'll enforcement And making domestic [indiscernible] the say [indiscernible]. the United think domestic of don't today. the a because problem States the attentive no. of same States henhouse. the laws And go that I United a way just the to when of United we very have things laws

laws we happen allow be inside. from weakening So the that cannot because would trade the to that

If you work. can't law enforce [indiscernible] doesn't the trade

prewar the of supply interest control So security. particularly to now. that's not it's of protected war so country in times that give chain we course, the over national one right these best in the are our Because, in production are of we things, why of of and things terms to away in or our

Operator

final concludes back comments. floor session. the That Mr. for I Goncalves you. Thank our turn question-and-answer to

Lourenco Goncalves

are XX buying is next the in back much in my mistake, hours, no for questions. But on this very make the to call for today. saga for play the participating us, open. my Great you you is over. as go we shares that to shares us Thank sale. because at be continue point will we [indiscernible] believe going are my the And window We

and day. have very a I'd Thank you and like to sale. buy great -- much, on So things

Operator

Thank concludes This today's conference call. you.

for disconnect lines time. you at your may Thank participation. this You

Cleveland-Cliffs (CLF) 30 Jan 242023 Q4 Earnings call transcript