Cleveland-Cliffs Suspends HBI Project Construction In Ohio

Cleveland-Cliffs Inc. (NYSE:CLF) announced that it is temporarily shutting down construction activities at its hot-briquetted iron (“HBI”) project site in Toledo, OH, effective Mar 20, following the guidelines from Ohio Governor’s office regarding the coronavirus pandemic.

The company will continue to analyze the COVID-19 situation and restart construction activities at its HBI project site as soon as possible. Notably, all other iron ore mining and steelmaking facilities of Cleveland-Cliffs will continue to operate.

The HBI facility was expected to start commercial production in the first half of 2020. On its fourth-quarter earnings call, the company expected to achieve nameplate capacity of 1.9 million metric tons of HBI in 2021, the first full calendar year of operation of the facility.

Shares of Cleveland-Cliffs have plunged 66% in the past year compared with the industry’s 38.6% decline.

In February, the company said that it expects average iron ore prices, steel prices and pellet premiums of $90 per metric ton, $650 per short ton and $50 per metric ton, respectively, for 2020. Based on the assumptions, it expects to generate net income of $300-$325 million and adjusted EBITDA of $550-$575 million for 2020 on a stand-alone basis.

Cleveland-Cliffs Inc. Price and Consensus

Zacks Rank & Stocks to Consider

Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Franco-Nevada Corporation (TSX:FNV) , NovaGold Resources Inc. (NYSE:NG) and Barrick Gold Corporation (NYSE:GOLD) .

Franco-Nevada has a projected earnings growth rate of 24.2% for 2020. The company’s shares have rallied 22% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NovaGold has a projected earnings growth rate of 11.1% for 2020. It currently flaunts a Zacks Rank #1. The company’s shares have surged 51.5% in a year.

Barrick Gold currently has a Zacks Rank #2 (Buy) and a projected earnings growth rate of 43.1% for 2020. The company’s shares have rallied 11.3% in a year.

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