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What Investors Should Know about Cliffs in a Very Weak Market (Part 1 of 11) Iron ore price performance
Benchmark iron ore prices have fallen ~13.0% year-to-date. Iron ore prices have hit a six-year low of $57 per ton. The prices of iron ore miners have not fallen uniformly, however, as we’ll see in this article.
How are iron ore companies doing?
BHP Billiton (BHP) and Rio Tinto (RIO) have been the best performers among all the iron ore miners since January 2015. They’re up 0.8% and down 0.8%, respectively. Vale S.A. (VALE) was down 22.9%. Pure play Fortescue Metals Group (FSUGY) is down 30.4%.
Cliffs Natural Resources (CLF) had the worst fall of all the above companies. It fell 34.9% year-to-date. CLF forms 2.9% of the SPDR S&P Metals and Mining ETF (XME).
BHP and RIO are best performers
BHP and RIO are doing better in terms of stock price performance in the iron ore sector since their results were a beat on market expectations. The cost-out programs and productivity gains are a major reason for the beat.
Cliffs continues to fall
Cliffs Natural Resources’ (CLF) stock prices fell to a fresh 52-week low of $4.24 on March 19. There are many reasons for this. Most of them relate to the iron ore supply glut coupled with slowing Chinese demand.
Cliffs is more sensitive to these than more diversified and bigger players such as BHP and RIO. Its main earning asset, the US iron ore division, is not involved in the seaborne market and is protected by legacy contracts with North American steelmakers. Its other divisions, particularly Bloom Lake, have been a drag, and high debt isn’t helping.
Before we look in detail at Cliffs Natural Resources’ (CLF) current situation, let’s get a quick overview of its business.
Continue to Part 2 Browse this series on Market Realist:
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CLIFFS Natural Resources
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PRODUCER |
CODE : CLF |
ISIN : US18683K1016 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
CLIFFS Natural Res is a iron producing company based in United states of america. CLIFFS Natural Res produces iron, coal in Australia, in Brazil and in Canada, and holds various exploration projects in Canada. Its main assets in production are WABUSH MINE, EMPIRE AND TILDEN MINES, HIBBING TACONITE, NORTHSHORE MINE, UNITED TACONITE, OAK GROVE MINE, GREEN RIDGE MINE and PINNACLE MINE in Canada, AUSTRALIAN IRON ORE and SONOMA in Australia and AMAPA in Brazil and its main exploration properties are MT JACKSON J1 in Australia and DIAGNOS, WAWA, FREEWEST, MC FAULD'S LAKE, MACFADYEN, WAWA CLAIMS and BIG DADDY in Canada. CLIFFS Natural Res is listed in France, in Germany and in United States of America. Its market capitalisation is US$ 3.8 billions as of today (€ 3.5 billions). Its stock quote reached its highest recent level on May 16, 2008 at US$ 99.17, and its lowest recent point on January 15, 2016 at US$ 1.20. CLIFFS Natural Res has 297 400 968 shares outstanding. |