Cleveland-Cliffs Considers Bid For US Steel; Tredegar And Radius Recycling Report Financial Results And More: Friday's Top Mining Stories

Top Stories for March 15, 2024:

1. Chief Executive Officer of Cleveland-Cliffs CLF Lourenco Goncalves said he is considering another bid for U.S. Steel X if the current Nippon Steel deal falls apart.

Goncalves added that he would have the backing of the steelworkers union but the bid would be a significantly lower price than the existing offer by Nippon.

For context, Nippon Steel's proposed 14.9 billion acquisition of U.S. Steel has come under increased scrutiny recently.

Several government officials including President Joe Biden have openly opposed the deal on the grounds of national security and the importance of keeping domestic steel production strong.

2. Tredegar Corporation TG reported fourth-quarter and full-year 2023 financial results.

The company reported a net loss of $35.6 million (-$1.04 per share) in Q4 2023, a sharp decline from the $3.9 million loss (-$0.11 per share) in Q4 2022.

Excluding special items, the ongoing operations reported a marginal net loss of $0.1 million in Q4 2023, compared to a net income of $0.5 million in the same quarter of the previous year. 

Full-year net income for 2023 was a loss of $105.9 million (-$3.10 per share), down from $28.5 million ($0.84 per share) in 2022.

EBITDA for Aluminum Extrusions decreased to $8.0 million from $8.9 million the previous year, with sales volume dropping to 32.9 million pounds from 37.2 million pounds. 

Open orders ended the quarter at 14 million pounds, significantly below the pre-pandemic range of 21 to 27 million pounds. 

PE Films’ EBITDA improved to $4.5 million from a negative $2.6 million in Q4 2022, with sales volume increasing to 8.5 million pounds. 

Flexible Packaging Films (Terphane) saw a decrease in EBITDA to $2.3 million from $7.0 million in Q4 2022, with a slight drop in sales volume. 

The declines in Terphane’s performance were attributed to reduced sales volume and margin, impacted by global oversupply and strong competition in Brazil.

President and CEO John Steitz said, "There are signs that the downturn at Bonnell, which we believe is a residual impact of the pandemic and started in the second half of 2022, has hit bottom and that a recovery is underway. In addition, U.S. authorities have made favorable preliminary determinations regarding a trade case backed by a coalition of members of the Aluminum Extruders Council." 

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3. Radius Recycling RDUS shared preliminary results for its fiscal second quarter of 2024.

The company expects a net loss of around $35 million, with a loss per share between $1.19 and $1.24. 

Adjusted EBITDA is anticipated to be $2 million and the adjusted loss per share from continuing operations should range between $1.05 and $1.10. 

Challenges included tight recycled metal supply, wet weather affecting sales volumes and prices and a 15% decrease in ferrous sales volumes due to supply issues. 

However, nonferrous sales volumes are up 7% year-over-year, and finished steel volumes increased by 5% year-over-year, with a steel mill utilization rate of 81%. 

Pricing for ferrous metals rose 8% quarter-over-quarter, while nonferrous prices increased by 3%, and finished steel prices remained flat. 

The company plans to cut costs and improve efficiency, aiming for $40 million in annual savings on top of a previous $30 million, including selling, general and administrative expense reduction by 10%. 

It also expects a Q2 operating cash outflow of $50 to $60 million, with Q2 capital expenditures of $15 million and projected fiscal 2024 capital expenditures of $80 million. 

Total debt is estimated at $374 million and net debt at $360 million by the end of Q2, with an effective tax rate of about 4% on GAAP results and 8% on adjusted non-GAAP results.

4. Steel Dynamics, Inc. STLD provided first quarter guidance for 2024.

The company expects first-quarter earnings between $3.51-$3.55 per share, up from Q4 2023’s $2.61 and slightly below Q1 2023’s $3.70. 

Stronger steel operations supported by demand from automotive, construction, energy and industrial sectors are driving improved results, especially in flat rolled steel and at its Sinton Texas division. 

Metals recycling earnings are set to rise due to better pricing and higher volumes. Despite a solid non-residential construction sector and a healthy order backlog, steel fabrication profits will be strong but lower than the last quarter due to seasonal effects and cost increases. 

Based on confidence in its earnings outlook and cash flow generation, the company also bought back $279 million in stock and raised its dividend by 8% to $0.46 per share. 

Earnings will be announced on April 23, 2024.

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