Buy Signal on CLeveland-Cliff Inc. (CLF-US)
Cleveland-Cliffs, formerly Cliffs Natural Resources Inc is a $ 3.3 bn market cap, and a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company operates its business through its US iron ore. The Company is an iron ore pellet producer, which primarily sells United States iron ore production to integrated steel mills in the United States, Canada and Mexico. In the United States, the company had four operating iron ore mines and one inactive indefinite mine.
The company just announced its decision to acquire ArcelorMittal USA, the North American operations of ArcelorMittal. In 2019, Cleveland-Cliffs posted $7.8 bn in revenue while ArcelorMittal USA's revenue was $10.4 bn. The combined entity will generate sales of $17 bn of which 40% coming from distributors and converters, and 27% attributable to the automotive market. This will push the company's automotive-oriented steel production up from just 3 million tons to 7 million.
Short term catalyst: Arcelor Mittal USA acquisition, Automotive market.
This signal looks consistent with the strong bullish momentum in the US basic resources sector.