Citi Maintains Buy on Cliffs Natural Resources

Citi is out with its report today on Cliffs Natural Resources CLF, maintaining Buy. In a note to clients, Citi writes, "We rate Cliffs Natural Resources Buy/High Risk (1H). Key elements of the investment thesis are: Improving Mill Utilization and Iron Ore Shipments – With the steep drop in North American steel mill utilization rates, CLF curtailed some of its mine supply, with '09 shipments of 16 mln equity long tons compared to 2008 shipments of 23 mln. As the North American mills restart their operations, CLF's shipments should improve. Benefiting from Global Consolidation – While the company is a small producer of iron ore globally, it benefits from the positive supply dynamics where the major Australian and Brazilian producers dominate 77% of seaborne trade." Citi maintains a $127 PT on CLF. Shares of CLF closed Tuesday at $89.20.