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Iron ore mining is getting difficult with time while also making it hard for the companies involved in its extractions. Shares of Cleveland-Cliffs Inc (NYSE: CLF), a mining company, plummeted by 5% yesterday, closing at $14.26. Though the market was expected to recover after the covid-19 pandemic, Russia-Ukraine war hit the global economy hard.
New Covid Variants May Hamper Growth
Recently, the company revealed their Q1 2023 financials revealing they had generated $5.3 Billion during the period. A major part of their steel-making revenue came directly from automotive sales. The sector is a core driver for sales from where they can benefit from in the future considering potential growth in vehicle demand. Genz is also making a shift towards electric vehicles to meet net zero carbon emissions. This would boost the demand for raw materials used in manufacturing.
Additionally, the mining company generated $1.3 Billion from the manufacturing market while $701 Million from sales to steel producers. Cleveland-Cliffs expects the new covid-variants to hamper the growth in 2023. Regulations to contain environmental risks may impact the company negatively. The U.S. government is working on its objective to go carbon negative by 2030. These likely complexities may hinder the company’s ability to source critical supplies.
According to the company’s sustainability report for 2022, they have recycled around 6.5 tonnes of recovered iron materials and steel scrap. It says demand for renewable energy will rise in forthcoming years. Their operations are primarily based in the US and may benefit from the nation’s goal to go carbon negative.
CLF Stock Price Analysis
Company shares are in a constant downtrend since March 2023, having lost almost 37% to this date. Supertrend shows CLF stock on a downward trajectory with price taking a nosedive to $14.24. A rebound is visible in the fibonacci retracements. Gann boxes highlight the value holding a resistance at $16.47.
Williams alligators is currently following a mouth open downtrend indicating the shares may see more decline. Woodies CCI is currently in the oversold zone, highlighting a possible rebound in the coming days. The company has increased its revenue expectations for their upcoming earnings to $5.78 Billion and EPS to $0.701.
According to Reuters, the iron ore market is losing momentum in China. The nation accounts for over half of global steel production and purchases around 70% seaborne iron ore. Furthermore, iron ore and steel productions might be losing strength. The Dragon is considering lowering their steel output target by 2.5% from 1.018 Billion tonnes last year. The country is also planning to source its iron ore supplies from West Africa to reduce their reliance on Australia.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
