Lourenco Goncalves, the CEO of Cleveland-Cliffs, has told investors that he will focus on a quality over volume approach. The Cleveland-based company bought AK Steel Holdings Corp. and ArcelorMittal USA assets in 2020.
“Under my watch, Cliffs had never been and will never be tempted by the stupidity of volume for volume’s sake,” Goncalves said on a call with analysts in October. “We will continue to manage our business in the most quality-focused and cost-efficient ways, always reaching for real value and return on invested capital.”
Import prices are already high because of increasing global demand for steel and because of the 25% steel tariffs Trump imposed almost three years ago. But the economics are beginning to make sense: the average tariff and transportation-adjusted import price is currently about $900 a ton, about 25% less than what it costs to buy from U.S. producers, according to Bloomberg Intelligence analyst Andrew Cosgrove.
A move to imports would run counter to Trump’s intent to protect domestic producers and Biden’s hope to bring back American jobs and factories. But customers may not be inclined to wait for additional or new capacity to come on line.
“The demand is not pre-COVID levels, but it’s just more than what we have in production today,” said Dan DeMare, a regional sales manager for Heidtman Steel, a service-center customer of U.S. Steel. “The steelmakers are going to make a load of money, but the stress it puts on the market is insane.”
