“We went through a very profitable and very solid quarter in terms of recovery in demand, particularly in the automotive sector,” he said during an appearance on “Closing Bell”.
The U.S. economy quickly slipped into recession with business closings and rising unemployment across the country, but demand for automobiles, along with demand in the housing market, has been one of the biggest drivers. unexpected highlights of the economic recovery.
The plants of the Big Three automaker in Detroit are now operating at near full capacity to reverse the production schedule and deliver new cars to dealerships as the holiday season approaches. SUV and pickup truck sales improved particularly well among consumer purchases.
Cleveland-Cliffs is the largest US producer of iron ore pellets, which are used in steel production. The Cleveland, Ohio-based company said Monday it would buy the U.S. assets of ArcelorMittal SA, the world’s largest steelmaker, for around $ 1.4 billion. The acquisition follows Cleveland-Cliffs’ $ 1.1 billion purchase of AK Steel in December.
The steel industry has suffered its worst recession since the 2008 financial crisis, as demand and prices for the product plummeted following plant closures.
“Cleveland-Cliffs has massive auto exposure and it hit us very seriously in the second quarter,” Goncalves said. “When the automobile closed in this country, we were forced to cut back on our production”, but “the third quarter was a completely different story”.
North American auto production fell by 2 million cars from the same period last year, according to Charlie Chesbrough, senior economist at Cox Auto, in part because consumer demand exceeds the time it takes to ship new ones. vehicles from factories to showrooms.
When automakers report September auto sales in the United States on Thursday, analysts believe the annualized pace of sales will exceed August’s rate, which stood at 15.2 million vehicles. That number is up from the annualized sales rate of 8.6 million vehicles in April, when the industry hit a pandemic-induced low.
Total sales for the month of September are expected to be 1.29 million units, which would be a decrease from 1.33 million units sold last month and a slight increase from 1.28 million units a year ago.
Cleveland-Cliffs shares rebounded 11.6% in Monday’s session to close at $ 6.56.