Cleveland-Cliffs plans to shift its scrap buying to an internal organization, mirroring moves made by other large steel producers.
In an initiative headed by chief financial officer Keith Koci which will start on 1 September, the steelmaker will begin sourcing scrap internally. This move will put the company on a short list of steel producers that also operate scrap buying arms, like Nucor with David J. Joseph and Steel Dynamics (SDI) with Omnisource.
The company has had conversations with scrap companies on this topic.
Cliffs also plans to buy more scrap as its blast furnaces increase their consumption of hot-briquetted iron (HBI), chief executive Lourenco Goncalves said in an interview with Argus.
Goncalves wants to increase the consumption of HBI, which is produced at the company's plant in Ohio, up from 60pc currently, he said.
With higher blast furnace HBI consumption, the company's electric arc furnaces (EAFs) — which had replaced some prime scrap with the internally produced HBI — will need additional prime scrap, Goncalves said.
"I will be in scrap very soon," Goncalves said. "Scrap is scarce, it's not increasing, and I want my piece of that."
