Cleveland Cliffs reported consolidated revenues of $239 million for Q1 2018, compared to the prior year's first-quarter revenues of $462 million. Cost of goods sold was $243 million in Q1 2018 compared to $365 million reported in the first quarter of 2017. The company recorded a net loss of $84 million in Q1 2018, which included a $71 million loss related to Asia Pacific Iron Ore, where Cliffs has ceased all mining activity. It announced new revenue recognition standards that make the year-on-year comparison more difficult.
Iron ore pellet sales in the first quarter totaled 1.611 million lt (1.585 million mt). In Q1 2018, Cliff realized revenues of $105/lt ($103/mt) for pellets, up 32 percent from Q1 2017. Cliffs is forecasting $102-107/lt ($100-105/mt) in pellet prices for 2018 with an annual sales volume of 20.5 million lt (20.2 million mt) of pellets, up about 500,000 lt (492,000 mt) from the previous forecast in late December 2017.
In a press release, CEO Lourenco Goncalves commented, “The strength in the domestic steel market we have seen so far this year is sustainable and should support very strong results for Cleveland-Cliffs in 2018." In 2018, Cliffs expects to spend $225 million on the Toledo HBI project and $50 million on the Northshore Mine upgrade. Goncalves noted that HBI margins could be double those of iron ore.