CLF Cleveland-Cliffs

Keith Koci EVP and CFO
Lourenco Goncalves CEO
Lucas Pipes B. Riley Securities
Phil Gibbs KeyBanc Capital Markets
Matthew Fields Bank of America
Seth Rosenfeld Exane
Sean Wondrack Deutsche Bank
Karl Blunden Goldman Sachs
Emily Chen Goldman Sachs
Call transcript
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Good morning, ladies and gentlemen. My name is Amy, and I will be your conference facilitator today.I would like to welcome everyone to the Cleveland Cliffs First Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. 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 for the Private Securities Litigation Reform Act of 1995.

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

Keith Koci

everyone. and Thanks, morning Amy, good

In first the XX%, EBITDA first results, assets AM flocks. $XXX electrical, due slab of included cold-rolled going last the in Going generally of represented increase XX% party we pellet maintenance from our and to XX% This what our XX% as expect segment, the X.X to quarter, million we Lakes see as stainless, by forward. net products, tons a steel reflecting sales the hot-rolled, right results former into Great the quarter annual of adjusted pricing XX% offset and over stronger with mix reduced is USA coated which consisting sold third well of quarter of remaining steel steelmaking rail. plate, our line full million with

our the AM for XXX associated and our the the solely certainly selling QX low average is QX point former is with because average forecast of mix price of in in plants. ton XXXX different aggregate USA Our lower than per year the

from are has in-house. our side, and benefits by cost decreases been in as scrap higher we prices productivity from HPI coke seeing gas. performance expected. alloys products use This for cost our year, using well higher the and came as coal, decreasing scrap, and to for as last Relative in On offset natural

labor $XXX in XXXX a short-term first to This higher be QX. After result impact structure $XX forward increased costs on the the higher XXXX. million resulting acquisition. purchase about this moving and runs refined. will the up. and We certainly basis same statement add-back is in be the was Cliffs. $XXX and through benefit the but due for to been AK also during pellets as a quarter anomaly We first first These cost, side sharing. iron AM half year and margin DD&A of year from has negative going impact inventory the purchased inventory on in $XXX ore a the legacy second working USA in profit important accounting will acquisition, creating a had cost EBITDA full are of costs. We the on quarters negligible previously further Cleveland our for at at that to now anomaly former pellets comparison a in from saw step tailwind the be purchased XXXX a that piece our we nearly cost not therefore pellet impact the in will An price $XX the million experienced million income of and we million the expect million through included quarter our prior transferring were approximately headwind

synergies million and later AM in acquisition, for synergies, some this in which from cost set year. we $XXX have As of motion effect already will the USA identified take

by annual of the a rate this $XXX from acquisitions. two target savings $XXX our of run of We the total million year combined are well positioned of to end reach million for

not recur will contains QX items flow, cash as far going previously As forward. that one-time several discussed

the as in contemplated other nearly well quarter acquisition impacts. the $XXX factoring agreement acquisition-related had first cash of the during ArcelorMittal million capital as to AR of working investment of the USA, due of AM was significant As completion a in unwind we the

now rebuilt. been We with completely and this receivables done are have

receivables saw related the working build the we rising deferred our of we Act in environment. CARES Second, capital January. million Also, related price pension corresponding to to made contribution steel to $XXX

year stimulus of With next years. will seven an the of extended reduced passage million by over be cash recent feature, amortization the pension $XX the most bill contributions and per average future the

Interest For quarters generating items we will than certain record outflow of years, flow. be will to XXXX. pension to CapEx lower levels future free reduced with and cash contributions Sustaining be will stimulus due payments deferral we lower lower be three expense approximately the be this also and new annually. expect be in In $XXX without will remaining the benefit. of million year, cash debt

and EBITDA had pricing, The billion higher incentive QX raw will to by QX, over build higher In a primarily Upon our profit guide visibility offset from material revert the adjusted addition, disclose working neutral improvement by we end increase enough we is from sharing earnings, by substantial QX. EBITDA to to and likely guided QX of year. driven we impacts capital a the for pricing releasing for time the project this $X.X to and alloys. pricing first compensation quarter unlike large scrap and March

of have currently billion and $X.X we $XXX current side, million liquidity in under our availability facility. cash the On credit

have paid the balance ABL the billion we of by to this end currently is off Our debt $X.X year. expect and

well significant we liquidity. of advantage care come what also believe today's EBITDA turn it every $X are Lourenco. And are debt in conservative short has Based relative of for in market, a we penalty find be adjusted very year In steel supporting Our take curve. our in this balance to of order. on will ourselves will reduced that paydown to the healthy market dollar portion estimates we now, and take a billion of forward seeing the over our to ABL I'll to debt instrument free of closing, positioned and added our

Lourenco Goncalves

Cliffs to of reporting AM Cleveland was very our the remarks and of for XXXX. quarter my quarter quarter prepared first And I on which USA everyone. first following full for start will morning our was Thank you, good integration, that successful results investors reminding we're this of clearly XXXX Keith December X, change culture a our the the profitability. massively it closing and acquisition currently

including return guiding numbers is attitude track the quarter pricing and the behind next like the million to massive is and $X Our billion commercial the we the of not towards for the EBITDA and capital-intensive on capital is necessary. be able the EBITDA are issues that, EBITDA reliability, steel The environment. in $X.X workplace balance quarter for steel main would QX, we safety year industry showing of lose equipment reason billion $XXX address invested we XXXX. of for If or in

not are greedy. We

jobs into appliance in the We spent going industry will right recovery and a that their are proving window AM That's and are steel don't addiction been forward. to their of bought consuming March. generate are they like are they COVID to Cleveland-Cliffs predict completely realistic. flat-rolled This back steel in we This negativity lot. AK USA hold thrive want the wrong. now they see and steel experts on money evidenced skyrocketing is is well to Steel when When money consuming for demise thing cars Unfortunately, like had opportunity that's why being economy class is great field to HVAC won't States. by These auto majority they continue folks that the being goods the had the an our and care only consumers and the America of or fix and don't just start the redirected producers apparently DCs. about consumer and sustain that Stimulus will of prices the care domestic United begun, middle Cliffs. and where about. Cleveland population paying Right industry clearly we are the they the provided easy

For December we employees we are X, are added the $XXX,XXX. our pay yearly employees materials, because already new And mistake, XXXX, workforce. our is Make median hiring have from no our we are record, adding Cleveland-Cliffs growing. proxy we to jobs. Since XX,XXX off XXX the

is we that our middle America The are thriving sector, for As and of main business a people way that this work. manufacturing factor vibrant do steel opportunities the the putting supporting and mouth a the class back our with with bringing at we are love all Cleveland-Cliffs, hard believe and following. new education always we money where in doing

buying First, take-or-pay of Prior to AM they Steel contracts. Cleveland type industry both from acquisitions Cliffs under were and consolidation. USA, AK of our

We pricing this, their As are And concern disciplined in satisfy me their more a product involved approach. with no top being was could order move a they and purchase leads burdened two, material. aggressive to the cases, that by many so steel we which their so supply filling on longer us. requirements could business result, up their end acquired they book, number

don't world's COX world US As is started transformative for US by marketplace. the XX%. sake. all deals, flexible just I dominates for easily. the can in or industry has This have our from past, contract, the forget, stated comprises China we the acquisitions, can see steel always played much the volume bad been while rationality emissions the in X% production automotive, otherwise, with But more away the walk have performance. we the and sport in be past And with in environmental to Of industry, responsible from volume's our

the emissions me due in We mid largest one in large more hot-rolled have scarcity for among of is country. the our COX countries. than my the have nations lowest long up unique leads the all major of the steel-making prime of pool of scrap production per XX% make cycle to massive of the final here ton taken and steel This use the advantage country. to also of steel among furnaces. will scrap. factor, in This higher pricing pellets production both the steel-making quarter nine term, EAFs blast that EAF produced drive reality EAFs of our U.S. prevalence long

of grade The Lower new more prime [indiscernible]. space for for their okay the stock as rolled sold or EAFs, is steady be but at you of is less will own good with a will of higher grades also net capacity products become big to but prime business, there prime high-grade actually the a back scarcity China's and not the the a continue processing which the sophisticated that, that flat-rolled of exporter of which but flat significantly steel, However, scrapped in at In to order have generating scrap. and term, Obsolete of integrated enjoy to Cliffs scrap incentivize prices will the prime manufacturers originate generation higher Combine efficient scrap in metallics, prices On problem. production scrap, become case EAF from scrap from side net Cleveland is coming likely rebar system. need growing cost it's top that's States products. make scrap the enough good both have rock. Meanwhile, with for all more to to not of EAFs the steel the importer it lower the scrap. United imported then our for needs for feedstock. be US we whilst near scrap, structure iron This not we points collection, scrap. has

force HBI has reserves the already and Our of same the years. the view own formulated been At into investments and It in plant time, mine fed transformational that is XXX% our our see HBI including ahead benefits years, interesting driving last executed of years acquisitions past pellets ore XXXX and own iron companies the of with has year. started other our of two We of five later. production conclusion our in-house to to past the the construction this enjoy and five sourced Cleveland-Cliffs get strategy the plant. for our actually our pellet by behind internally decades

expect shipment. million Our of far in this direct since production X.X in a had reduction free annual our reach start-up thus has to fast on plan and of tons the Tons month rate of XXXX and exceeded the few March run our HBI expectations months cash of and December remarkable already has quarter.

most already of have clients prices, blast their outside at own we of While at and all some products we furnaces HBI in currently have melt. very far makes been HBI. our internally internal used our of tonnage have up own shipped Operational in and select the results to good thus Particularly usage HBI between expectations our BOFs. kinds of our EAFs, XX% XX% both EAFs

has point, our substantially improved lower importantly, gases also need effectively More structure. for sell lowered our this to emissions year. scrap. Cleveland-Cliffs that has acquisitions plant need prime to asked our Toledo iron direct with lowering HBI just We cost eliminated our buy and has reduction It third and exclusively at our of dynamic to chrome grades only our company buy in the two to intention who but another was yields. changed original The parties last HBI greenhouse

an did Given our I'm factor, and differentiating not our HBI expectations This incredibly resource contracts is for long-term third parties. forward. sign the I supply important I not going and them Cleveland-Cliffs them is happy to now we build contracts scrap want need markets, HBI forward. did why both internal and I don't supply plant, to the going long-term don't to now have

and the our is integrated in of the For our one performance of the quality the factors Cleveland-Cliffs competitors, consistent positive from all our both HBI of of we mini-mills. both most record, out environmental, and get rest plants, in differentiating

nicely. steel operation things the progressing been On have side,

Middletown than ahead days and major vessel maintenance We any furnace DOS a success. completed was do in in schedule. not And XX scheduled Our have finished was the blast outage QX. the less outages we repair of

and We components getting are impact a focused have end in hear on really steel automotive, to out electronic shortage not parts Despite other this huge all volumes the about seen we market. door. of supply of we on

line starting running been help their output response our and in care our demand. coating restocking capacity and we quarter high Columbus clients at We to that this have demand of coating of will galvanizing our full lines products our own galvanized our increase take second will in outstanding

has that price and market. completed the nice with rate small of that tonnage to able higher our We to going Xst to service plan continue automotive automotive in linked these we customers deferred, been improvement have margin of margins divert been to forward. amount the For increases see contract April to renewals significant spot all

than we cash support be free record to in of the nine months at immense this it put of year. to our a generation of used EBITDA by cash Amy With last and will down our forecast, beyond, us expect I will leverage one-time Q&A. over less of that, year for turn of flow that debt. to generate actions Under a flow which pay All for XXXX will the cash and latest level end the figure


Please [Operator first Your Riley the Lucas with your question line comes Instructions] today B. proceed from Securities. of Pipes question. with

Lucas Pipes

success. continued the on Congratulations

Lourenco Goncalves

you. Thank

Lucas Pipes

bit agreements capture been on relationships if your a and fact, value to what wanted but now for prior or On you. about part. what could And you and I could these calls, ways, in appreciate improved discussions do to that just Thank this what in allow delicate it is any, ask, evolve. do a Lourenco in of little have there I of auto matter supply terms continue

Lourenco Goncalves

or of a we for break us AK Steel because a important, Lucas, depend it's business automotive percentage AK overall was automotive news the They a even dramatically, relationship our on stand-alone we it The in them. like on Steel company. still and make great the built on when that depend dropped not is good though business is since it's is co-dependence. AM so was relationship USA, acquired

steel Another grades the more is Steel, The thing Steel a for Cleveland-Cliffs AK only real the that alone was sophisticated real USA. that owned competition for AM competition AK almost and for of year.

now So both. we own

of with negotiate that. doing them automotive beggar. and in already retrospect, realized no respect a we negotiating clients, they longer with with respect great. the the They a So treats that And so they have are demands supplier are lot

table think someone they every this to haven't at time about there of shut tight the play that know any should side playing loves down is clients but contract We hardball. to in negotiations hardball yet had they that

good. so far so So,

Lucas Pipes

perspectives go of details you, some with and Biden maybe President then Thank to this and you've of going impacts on what's example, That's and and And China reductions as spent you for steel on back opportunity has or had course XXXX, about I it the remarks. your and ore the each outbidding President could implications has for it's for wondered iron markets, prepared Day on reductions by then US what and a helpful. today well. for extent the Earth in bit global an you Xi very risk US major and of context on talking are quite always great been you Lourenco. in of other carbon the announcements carbon time in larger But course a

And so would I it all appreciate those could of response you. as your it. stops wrapping together, Thank you in well, kind if include that, really

Lourenco Goncalves

pack to can. an answer for the you, try lot but a summarize it's I Yes, I in will best to

leadership fact conversation are is but say overdue. US companies too that environmental anything lot. First have this from heard the Stated and the way of have welcome saying much United don't believe all, I is very that can to they in the it's and anyway, that President I say, retaking Biden a move countries a

We have and and the That's order laws most out. the States, you day the with in in most operate serious day stock. the stringent them to regulations. and comply In need United to

don't will in us many years don't the is we come They I learn. that one That's only hide the in and hide to certainty The other of to XXXX, say by he the only dead. thing this I President in about be will that road, XXXX have XXXX. they that corner. great hate whoever see around for certainty years XX% in the and There business old call established are too Biden call. companies and that or XX about what XX, they that of behind I is call deadline countries carbon-neutral XX saying XXXX, they and China, that love the we when think all be are doing of XXXX in companies that that case keyboards, a reduction the down have is I is they

thirties for a dead XXXX old at it's that certainty very forties, so have. good only good time. Biden XXXX That's around that target corner, is the that you're start. if reduction XX% XXXX. about anyway, from And of the point that's So a is you so not putting we the and he talking and are But to is

we look in base in you reduction XXXX XXXX. a If commitments, taking at case about talking are our environmental as XX%

yet checked are that We haven't announcement came this I morning. we this believe XXXX already there. But because

we the So That not we beginning of did us XXXX. we're was counting when because for XXXX, that's the with good start the plan HBI counting HBI. started

in going realistic to to data are. see our greenhouse they to the are is start the the responsible be United and gas forward is State will business, from XX% emissions business, the we China start responsible X%. Going of things way for for steel

United excellent all our EAFs at fill we the and are from with in from Here States, blast that performance remaining all have Cleveland-Cliffs also from from pellets. EAFs furnaces

performance furnace very Our Middletown that blast a to similar have EAF. is an

arrangement coregen Our Dearborn just of to the have with because blast we'll look the we energy Dearborn that furnace DDI. number into

We the have below EAFs. numbers that are

hardest that's fixed. thing needs be that to So the

better Our accounted blast in being for. not and furnace in are EAF. things as accounted there the are that It's EAFs that being well way Dearborn Dearborn for is for there accounted as are on things things than the not just in not are are

in For imported iron everything Scope X Scope the iron imported against and been X. example, pig reported pig because goes usage of X and Scope that's

academics side reality to and So are world the in sell that reality. Cleveland-Cliffs sink and real and to story the in are people be President prevail starting in things is of between going short, President being will of the services, discussed involvement start will funded Xi, we terms in of will long consulting to with more Biden

Lucas Pipes

have but very everyone. be want Lourenco. questions, Thank I Very, to of more I respectful helpful. you,

over. it of best and turn continued Thank I'll So you luck.

Lourenco Goncalves

a lot, Lucas. Thanks it. Appreciate


KeyBanc question. Markets. of Your comes line Capital next your from with question with Phil Please proceed Gibbs the

Phil Gibbs

behind keyboard Hi, Lourenco. in here, the am Good also I morning. but not basement. my

which So nice. that I've CapEx any Lourenco, that? got is going update year, this for me, on

Lourenco Goncalves

not the that but right. about talking Keith certainly about All you, I'm the I'll Gibbs. kids Keith handle talking am let look, when keyboard, go ahead. behind

Keith Koci

to $XXX Yes. that talked time we're for our at the about at XXX. range. XXX high We're of Phil, That's for current million forecast. around end the looking no, we year. still Last

we're XXX. Now, at

Phil Gibbs

you higher expectation restarted, the Okay. with Middletown And have you an in have then do do steel volumes second for quarter?

Lourenco Goncalves

it's like say outage association. That's question. a that. we That that When furnace major, our something blast will bad Middletown that's Good. me allow we of to a a prepare do an good for

they loaded any PMO, had that. because steel. throughput should bend lower the of So they that Lourenco, warehouses because Cleveland-Cliffs through days, levers enough clients the never slabs, process, was are lot have we we that's clients down we Middletown will we had that put to have hard, full XX.X far can't all much had blast full Actually, And Middletown never all get furnace you we complaining XX never everything. These XXX, when the they hot enough in that are cold-rolled days, that. shape. enough because the say, Yes. the again, well, lines their as have than we And and had was hot and working to not tell roof you enough could as truck, we the then receiving the you, that better bend, keep a are we And could Phil. even close have been had

XX, to do then they be another it quote So because drop were XX XX, were, waiting for to didn't opportunistic. bucks they they unquote

What need they only players profitable, So in of everything is all even anything. is Because we There taking is to what profitability. destroy, capital-intensive good do this all on complicate, information, are collecting it's that Do really Because belong. are we in this talk prices place this that that is makes on is marketplace. done care can't in the in shareholders, of making they some this no the level need in send only need that business the others What one return return opportunistic unquote they fake to believe way for have not just because we taking can't phone, is debt, They do stability. chain company most we the you don't, gossip, for pointed they marketplace. higher we XXXX prices. basically pay care we This quote them, There some don't we anything. do we are and sense. know don't dividends of have real on a real field. complaining Without We need to be company can't We capital. of to are we about pay capital, at supply industry they down for - can't money. invested a invested a why? I that's

So that's what we were working for.

We are doing our mandate.

We are doing our job.

We the behalf shareholders of are on working the of company.

Phil Gibbs

So little industry essentially a stable a sheet range. maybe a big volume what kind reasonably your your should part that saying maybe supply be the part automotive here the perhaps little domestically. is big chain business. a this It's down but certainly of bit, of of is up But bit within

down Were actually just ramping the to could, know on prospects in I year? taking Lourenco. place, your you our expect on. and customers are taking again? back second ramping volume I side. a you what's in of think shutdowns seat tough if steel what's and Thanks, just half want still on just terms mean It's the do are the from of we up going back happening of view, better the up but are that there in shipments quarter down the them obviously

Lourenco Goncalves

Phil. Yes.

XXX,XXX a tons everyone to supply while much of carbon stainless. X.X year tons and we know another We everything of our size. pretty million a supply numbers, rough steel You year because

up and deals we be don't because the plant little know up $XXXX we automotive. are I to I good we we but a we chips up another were have I'll to with A, have in, have impact tons million morning, $XXXX way these foam, less take Phil, week for customer service next net delivering spot X, with didn't haven't Y, then catch that is seen that Z. catches above our real centers In but have another the a closed been week don't increase shortages. and And OEM supply to they we down rubber a because are don't orders both you, all know care of very ton. and have they been or if So them. don't because then then able plants honest net prices X on or plant we Yes, cutting ton on But catch prices. have the and able they they you meantime, the hot-rolled reported per per this then to

we're trend in will good and that's and So this fantastic, shape continue.

So care no real everybody our not is I'm their respective talking about there is board, much supplying from one, supplier them. are big and be a impact the as across so but pretty a could standpoint be big really could of one, own and businesses, we taking

So us. on no impact

in say are but producing As Because as more. more I that's do more that? just little we bringing school far marketplace, we or producing galvanized a less, the galvanized. producing Why are back old things that's and

will going using a we're come are is will of in X we oh using to Ashland HBI they the picture. capacity. metal long and operation. because back. part in Harbor are Ashland done. operation And then Indiana Harbor for not producing HBI in X, Dearborn, Indiana that, than operation say are off but neither other back, time, we Middletown. are Indiana they we're Yes, at not And we're not they Harbor They not are come producing in So They never and is are They hot using nor in X. HBI more

back. bringing So increased not furnace any that's and more what increased continue will blast produce doing productivity, throughput, we we're to and


Bank line question. comes Matthew Please today of your proceed with with America. from Your Fields next question the of

Matthew Fields

momentum. and [Foreign Language] Congratulations success on quarter the, the on the continued great this

to of the for there's if you've wondering sort assets older middle projects you've or been kind five now, Steelton, that any four that are in or of the if like Burns just and Now Harbor review plants this the two seen or major you months taken of the any some mill, need to or plate of next batteries? coke in the Conshohocken might do year whether taken

Lourenco Goncalves

example, level and are. we assets and extremely believe we do is few diligence those these you into is are will for niche that us being which great really need mentioned business. during of same talked learn We major the like of that businesses, not released results today level KeithKoci there assets them used compare at our Yes, the numbers excellent the we the the to we nothing and months, with be ones care a a said, assets are are my everything good taking assets Steel. during and that do relationship for love we that status in perfect. doing the assets the we overall Coatesville grow Coshohocken. the of time a all of continue to reconnected we due business the CapEx make so And call, and these about, We lot AK from we with already now know is really found with and well. Yes, That's that been to that This we we be contemplated say we expecting. metals thing to we for Pentagon them in a Conshohocken, has specifically all business

the best to continue out Harbor performer said business. of Plate as by plate We grow Burns this will clients. is there the

and our in they in are of So And if what care the includes taking my out And something to say. Harbor saying know the that's competition to business the Gary that competition. that's I than clients saying guys also they're Plate plate but Plate. Burns appreciate. don't of what clients they, plate we better are different

as So lot is a very loves business right, niche price you there you a in long of a make business The that's EAFs as money HBI. there. our over Steelton is

scrap buying longer over no are We there.

marketplace, margin, very buying normal the replacing scrap the are not and are third-party HDI to profitable a costs HPI service because very by scrap we prime you but we a saving, good selling for competition. HBI. savings are making in than And are Steelton clients that in the denying the business, make easing, know, margins our money we more sell we making in high We using the better for

good all I so perfect, don't all it's Matt. So know

Matthew Fields

my in important of, attention world the That's that pay your of way kind lot to know helpful. this like to a lot probably I not business, then you a of I And folks but run this stuff. is

around fee on? reason mismatched just credit on prices, is can and very and any kind they're something or they'll gets you just Is Or point? going way S&P. steel come just it that doesn't you come of added ratings that they kind your seems triple when steel too at absurd Moody's this actively around Is S&P of environment what's it So between which get the focus that with behind? there rating, are

Lourenco Goncalves

I used much and and the did Fitch. Look, I'm saying last well. Fitch is I Keith better and use S&P why in Celso just also but and that Moody's deal Moody's horrible. S&P, That's as are saying that not just I not noticed I'm that

they they it. don't blind and get just So that are

an ask will know, working, I them. So bad. we've reply you so their just might they next don't brain is or give they're answer, got otherwise, If they day, barely they data receive the

Matthew Fields

enough. fair Yes,

Lourenco Goncalves

to yield do will Let investors that followup anything. me, day you rating don't Matt. allow that with without you guys a be have high me do these a know because folks know deal a let you all the would When

at the price But my double my with deals use and a there? need still to I I below rating my B level rating. print to rate. go don't of at price So, I I investors out different mean that a I plus. a why match ratings. price my like B see deals I

Matt. know that, you So

long, been for long You have us following a time.

Matthew Fields

I the than investors smarter Well, agencies. think are sometimes the high-yield rating

Lourenco Goncalves

But without I to they anyway. are not a believe so, find do so enough rating, too. frickin

Matthew Fields

hope lot a if XX, but about of like that's one wrong you. I'd right things, thing with I and you're been past live okay you've Lastly, to about

Lourenco Goncalves

say sorry, again. it I'm

Matthew Fields

about XX. in 'cause really make dead of like lot it to I we're XXXX you're been but You've I'd all past wrong things, a hope about right

Lourenco Goncalves

will praying look, I for you Yes, today. start

to going I that think and three working overtime.


question next comes your today question. of Your with Exane. proceed Seth line from Please Rosenfeld the from

Seth Rosenfeld

carbon the capacity what that to over Do medium couple emissions versus please. decarbonization has expand your please. especially might another you term, A to the On decarbonization, market on EAF that particular, on view you HBI asset cutting be expand further very positive carbon and your out the significantly you in peers US reduce Asia. footprint a HBI considered? over capital, made timeframe how in for in Starting one obviously big mix quite then of in Wondering questions order see working Cliffs progressing about obviously here. spoke or progress opportunity

Lourenco Goncalves

on that. Yes. opportunities see I

Seth Rosenfeld

of we you the If CapEx Okay. Is a consider there moving level investment? after which understand could deleveraging, parts. larger can

Lourenco Goncalves

real are investments need by, motivated CapEx. CapEx Large not availability by of

for keep HBI, a Cleveland-Cliffs mind was massive time of an million Laurenco. there plant I X.X it investment produce tons when we done of in be $XXX me would metric So, right Because will was anyway. that with to have do. a started brand I thing building not HBI people today congratulations, legacy If the I million at announcing budget that, be HBI the telling and to and made

doing you nobody So about the said and you an can will finish was you widowmaker HBI for on plant thinking that be budget. what? and really good plant HBI time Guess something thinking Remember ahead, are that environment. that a finish are on that

where breakthrough are what dealing environmental down else with ArcelorMittal that's in in a probably exception mess what, Europe on ones increased several decarbonizing. time, years spending that spending we they or fighting talking and people girl even a You it hundred hydrogen the not a old. is are Goldman in as and running using towers go have finished And all The against we XX our talking decarbonizing. far about. $X that they're at we that about size they there, technologies really about we that know for technology release billion, instead said where finished Switzerland are I'm for dealing In really million environmental. talking about the Europe bankruptcy, universe with in not Europe that. they Sachs, We in frickin on are results. and talking the They're when you about are the the do lenders lot that budget, of they the they It's know show going. live, talking as now is person banks Everybody

old XX it's guy XX years Here a for years. that has been this doing

If more you better be paying off. attention, guys start you'd

to We about know also need decarbonization.

Seth Rosenfeld

give question ahead you please whether looking Okay, One Working that's us not flow, clear. a Can significant investment or shorter-term you sense on please. into cash QX. in obviously QX capital very more going the or able stable investment, the working to price given get strength of a capital and been that need into incremental year? investment cyclicality already quarter levels think second the have for you

Lourenco Goncalves

Yes. Keith will Language] answer [Foreign that.

Keith Koci

We here little will more build in prices. a QX see

Our up, selling to therefore go prices to our receivables are continue go up. going

build stable So in receivables $XXX and for million the our $XXX to working embedded in on then remainder. QX capital numbers obviously of think million I


[Operator from Instructions] the Please question line Wondrack Bank. comes Your question. next from proceed Sean of Deutsche your with

Sean Wondrack

prices I'm Thank billion of Is CapEx. April there? up got flow and that up, to of did free This at you Are is amazing or free the that thinking This that when takes assuming of $XXX cash time. sort and there this the X a XXXX. far implying you. reading of is am guidance right? the capital EBITDA, working like billions in hold guidance I now totally backs It's back the cry cash you that I'm correctly flow. puts just million it from you buyback look guidance see other at

Lourenco Goncalves

reading correctly. are You extremely

That's free We are billion correct. talking cash. of X.X about

the when applied debt. X will the right. were and times really continue of get pay year, will And going down I leverage to pay be what, And we're we below end debt. it to to be all guess You to down

Sean Wondrack

Makes lot sense. Right. of a

Lourenco Goncalves

because free. I don't don't to have another be if going know they debt when free be billion know know EBITDA happen to that Yes. tons of if want year debt I of next. you steel footprint know going what, what's COVID. want are I I We to a producing plus X a free, What good. I'm debt producing have my I to XX is million year,

Sean Wondrack

right. All

ABL billion roughly your have you think I $X.X now. on right that's, Now

just debt any do secured maybe as did you or out from, it think and to the comes. you time take Aside other the refi repay debt

Lourenco Goncalves

are to We we in cash. everything. settle No, start paying going tranches

We completely to end the we're what cash. take and now between going and take I'm And have down to the plan laid with tranches all of out when. them on going XXXX

a part I will from even you know? need really That will We the the that rating not be will agency. rating miss,

Sean Wondrack

Yes. Well pricing at B are your anyway. a bonds single

thank answering you the here. get But my people think very question. for much picture I So

Lourenco Goncalves

you you know. XXX an money So, rating. competition, yes, That's want the all giving this rating, XXX time. give basis start know what, C, to the to to need give LG it. They D, investors Every one the what points, the see. as start I'd what me all whole LG, that's price time, like A, they B, to rating have from agency, you them


question. comes of Karl question next your Goldman proceed Sachs. with from Your the Please Blunden with line

Karl Blunden

quite This of Thank of comes might you. of extension mean that guidance. that strong debt Good be cash and congrats you've the have I an morning, a on got guys, but you now, results down. lot bit debt flow a question, when

you you whether get to to returns you into your a of ability to think and have economic with prioritize or where on shareholders it's dividends see return, go to kind want flow. share potentially decisions You make do see 'XX 'XX you sight cash line timeframe buybacks. What based as would of or

thoughts that. interested in be on your Just

Lourenco Goncalves


above. the of All

we when of good and address get have will to a the we above. is This All problem there.

same now the other the the to commit that pay for dollar down price not stock paying goes down debt. right will equity to anything and we debt with enterprise other goes We will we the value to appreciate. than Every side, single and the start on

for money, in in a money in believing company, to making a a where know in company moment I that employees It's real everything like are explore should said hard we The States contractors. the to consumer investors doesn't is example move don't time they we tech well side. that cab have are Uber the tech companies it's a in as prepared start to We And to have to consuming, is is which the booming. remarks, and my here want continue appreciate. for to are stock I United economy time price selling

to do, to we'll are continue side So class stay the absolutely consumption, move the ones anyway, generate there What economy. to we'll notice we're create debt forever. that to equity and starting is numbers trade are absurd, the that continue to going ones money. And to are at thing we That's because companies the the to not ridiculous making absolutely what the middle the this side. move Investors real we from the take strong, multiples doing that ones the generate need that ability

Karl Blunden

sense. I Yes, makes mean,

more there a investments, is in have you environment. to an has be is the not that that inorganic bigger healthier When that argument options market pretty in to there think opportunities as quickly but are equation or think are it's or growth about developed large immediate North I because of the maybe America there, US you pretty part steel there efficient? well other integrating become you're the like matured

Lourenco Goncalves

acquired acted it when buy dance. When to would saw us AM And I the furnace. Yes, USA to a I buy very and showed company company there to takes a two that we rule I was to opportunity went the buy anything, Steel AK up opportunity but out never swiftly. then for acquired,

business is we not good. efficiency. believe We are we out way but lookout more anything, that rule So always doing of will in the for our

that's from we and advantage most thing people have. don't came exploit people. We USA, happy important the both Our people they don't take people. are are good is of they AM culture and us. steel the We pay well. We that with And AK

a when go creates acquire company, in we fire don't employees we of of it and So and say the costs. because saving we a half lot momentum, are

hiring We are doing the people. opposite, we are

time, we people Cleveland-Cliffs. of love for workforce really work so over eliminating are creating to that are We a

then except the that no go I'm so what no XXX%, and and in we're there going I to debt out. I things numbers creating quarter other another do point, targets place is the to at that act is doing paying but we'll a down yes, equity. have So, one and My I over have improved That's a the right have XXX% on debt now. right price. now. have And continue not real eliminating usually stock focus fast this something between I have and to possibility when target


from Emily of comes your line question Please the Sachs. next question. Chen with Your with proceed Goldman

Emily Chen

on one, an It not from the but keep quarter. given any for online maybe, sort how your makes be time. blast I to rates,you scheduled on the the plan tightness earlier, ultimately utilization think look Hi, love the expect X prices can Apologies last, call I outlined X to doesn't to year. you running this remember and is for of last much missed think furnaces the congratulations long views do which if to any where and remainder you get previously sense excellent are XQ, given supply of if will you point to I I'd there at like but

Lourenco Goncalves

Look, Emily.

XX We have X areas. blast furnaces in

go So furnaces one. let's one by XX the blast

take have up. it dead, We in so one Ashland that's

have We that's one in Middletown running.

We have one in Dearborn that's running.

North Indiana X in the have it's We furnace biggest Harbor which running. America, blast is

Harbor X Indiana that's it's have We smaller, running.

ever. We going have Indiana come back Harbor It's X not to that's dead.

in X, both Harbor, in Burns and we D, We have two two X running. have C and and Cleveland,

way pig, When will by So please X, I'm say two X, I X, that, going about forget because alone, Oh not back. No! iron Emily, So sell never, never. we're to X, X X, come X, was produce you X, discounting I the to saying to never said X pig X, everybody. that that's it. I

not So to going it's happen.

no a we longer for we're supplier are a Now competitor. EAFs,

iron. with supply to going not them I'm So pig

So are No. they for sale?

pig be So that's produce supply buy to those to They iron to happen. are pig are nobody under will not my going and furnace not control. going They iron.

I for rule I because put That's most saying So have have in Austria. X X the if X, one during of Texas like have Also we what HBI. XX blast supply any actually X in to rest But in of or plant running and thumb of why a sophisticated say furnace. remarks, are days, the could right their blast two. using That's was you between would all we understood their furnace. at given prepared use now. the HBI They're my and X, furnaces maybe in I time, X. repair I be Middletown

put a cheaper, our we in simpler, a plant blast So supply this Lakes the it's the a difference furnace lot smarter. lot Great that where lot to Toledo in

that's so what are doing. anyway, So we

our eight are throughput with the we So furnaces. increasing

in EAFs bit four Coatesville, at they are Steelton, We people they And also Mansfield. are and they forget, running little are above have that capacity. that are a capacity they are Butler,

supports. we we And exactly that So at market do to the continue that. running capacity will

stainless for going to So We're for not electrical don't clients destroy price. to not that produce steel to we steel going part are overproduce exist.

the company. that's So

That's So doesn't these down go beginning furnace We throughput. wheel galvanizing go more define are big - already at and to of become there through Then things you say. and the complicated, the hot flow line was flow. but through the and the mill I'm trying time the the a what the line. the strip so very through


the queue no I closing at turn questions the to further time. any back in there And call presenters for remarks. are this

Lourenco Goncalves

a interest much will be Bye Thank now. Cleveland-Cliffs touch. lot. we on very in you for Thanks your


today's call. this you And participation. your conference concludes Thank for

You may now disconnect.