Cliffs readies Toledo HBI plant for 1Q shipments

Cleveland-Cliffs expects shipments from its new Toledo, Ohio, hot-briquetted iron (HBI) plant to begin late in the first quarter and to reach full capacity by the second quarter.

The integrated steelmaker began production at the 2mn t/yr plant in December. Construction was temporarily halted on the HBI plant in March because of Covid-19 restrictions, pushing back its first half 2020 schedule at the time. Prior to its recent acquisitions, Cliffs had targeted costumers in the Midwest for its HBI shipments as well as some mills in the south, closer to Gulf coast competitor Voestalpine.

Still, Voestalpine focused more heavily on export markets during the year. The company exported more than 1mn t in 2020 from its HBI plant in Corpus Christi, Texas — a record — over half of which went to China amid a steep drop in domestic demand.

Cliffs completed its $3.3bn acquisition of nearly all of ArcelorMittal's US assets in early December, becoming the largest US flat-rolled steelmaker and the second largest total US steel producer by capacity, trailing only Nucor. Cliffs began 2020 with no steel producing facilities and first acquired AK Steel in March.

Fourth-quarter steel sales, which partially include the ArcelorMittal assets, hit 1.9mn short tons (st), up from 1.12mn st in the third quarter, the company said today in a preliminary earnings statement.

Revenue in the quarter rose to $2.2bn-2.3bn from $534mn a year earlier, driven by the AK Steel and ArcelorMittal acquisitions.

Both finished steel and iron metallic prices rose sharply during the fourth quarter. US hot-rolled coil prices on 29 December hit $1,000/st, a 2020 high and up from $640/st at the start of the quarter. Basic pig iron prices, the closest metallic equivalent to HBI, rose over the same period to $560/t cfr New Orleans from $387/t.

By Zach Schumacher