Cliffs' Chairman, President, and CEO Lourenco Goncalves said: “Our strong third quarter results reflect the positive outcome of the actions we took in Q2, when we saw opportunity when others were paralyzed. During the almost three months when our main market, the automotive industry, went through unprecedented shutdowns across the entire sector, we prepared our inventories and our plants to be ready as soon as our clients were back in business. As a direct consequence of that, we generated $150 million in free cash flow during the quarter.”

Mr. Goncalves added: “Our results demonstrate how quickly and efficiently we were able to turn things around. The new way of doing business we have been implementing in our newly acquired steel assets is demonstrated by our strong cost performance across the entire company, allowing us to benefit from improved demand and higher sales prices. While the third quarter started slow with underlying demand in July not very different from June, business activity progressively improved through the quarter, achieving in September shipment rates normalized to prior-year levels. This momentum has continued into October and, as such, we look forward to even further improved financial results in the fourth quarter.”

Mr. Goncalves concluded, “On September 28th we announced the acquisition of ArcelorMittal USA, a transaction we expect to close by the end of this year. We continue to be thrilled about the future of Cleveland-Cliffs with this asset portfolio all under one roof and the significant optimization opportunities that come with it. The completion of this deal should also coincide with the start-up of our Toledo HBI plant, which is currently being commissioned. With all that, we will be ending this uniquely challenging year on a high note, and all set for a sensational and transformative year in 2021.”

Mining and Pelletizing

*Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin.

Third-quarter Mining and Pelletizing pellet sales volume of 4.9 million long tons included 1.2 million long tons of intercompany sales. Cash cost per ton of $68 per long ton included approximately $2 per long ton of idle costs.

Outlook and Market Commentary

All outlook projections only refer to Cliffs as currently positioned, and do not contemplate the pending acquisition of substantially all of the operations of ArcelorMittal USA, which is expected to close in the fourth quarter of 2020, subject to the receipt of regulatory approval and the satisfaction of other customary closing conditions.

Regarding business outlook, Mr. Goncalves stated: "As we continue to fulfill orders for our automotive customers at a remarkably healthy pace, with our facilities back to normalized operating rates and with current pricing, we would expect further sequential improvement in our adjusted EBITDA performance in the fourth quarter. This takes into account increased shipments from both our Steel & Manufacturing and Mining & Pelletizing segments, as well as an expected sharp reduction in idle costs."

The Company has lowered its full-year 2020 capital spending budget to approximately $500 million. Fourth-quarter expenditures are expected to be approximately $125 million, including $65 million related to the completion of the Toledo HBI plant and $15 million in capitalized interest.

More Info: Cleveland-Cliffs Inc. Reports Third-Quarter 2020 Results