Speaking during the company’s quarterly earnings call, chief executive Lourenco Goncalves explained that electric arc furnace producers could not possibly take all of the blast furnace market share at once. 

“While some less-efficient blast furnaces have already shut down, the best in class are surviving and will stay in place for several years,” he said. “There is not enough high-quality scrap and metallics (available) to match the tonnage and quality levels that the best integrated mills in the steel market currently produce,” he said.   

Cliffs, the pre-eminent iron ore supplier in the U.S., reported third-quarter net income of US$91 million, or 33 cents per diluted share. During the same quarter last year, the company recorded US$438 million, or US$1.41 per diluted share, in net income. Last year’s result included a one-time gain of US$228 million related to historical changes in foreign currency translation. 

The company said its third-quarter profits were mitigated by lower sales volumes and iron ore prices. Still, the company is well-positioned and is delivering results, Goncalves said. 

“While irrational behavior by one major supplier in the pellet marketplace has dampened the Atlantic Basin pellet premium, our business remains on solid footing with a very strong balance sheet supporting our world-class operations in Minnesota and in Michigan," Goncalves said.  

"We believe the currently weak steel prices in the United States are temporary, and the cyclicality associated with our business should be largely mitigated as we start up hot briquetted iron next year.”

Cliffs’ new HBI plant reached a key construction milestone last month as crews topped out the facility’s 457-foot furnace tower.  

“We still have a lot of work to do, but we remain well on track to bring Cleveland-Cliffs into the next generation of steelmaking by the first half of next year,” Goncalves said.