US-based coal producer Cliffs Natural Resources has announced that in the second quarter of the current year its sales revenue decreased by 26 percent to $1.1 billion compared to the corresponding quarter of the previous year. The lower revenues were primarily driven by significantly decreased market pricing for iron ore and metallurgical coal, as well as a 24 percent decrease in sales volume from the company's US iron ore operations.
For the second quarter of 2014, Cliffs recorded a net loss of $2 million, or $0.01 per diluted share, compared with a net income of $133 million, or $0.82 per diluted share, in the second quarter of 2013.
According to Cliffs' statement, iron ore pellet sales volume from the US operations was 4.3 million tons, compared with 5.7 million tons in the second quarter of 2013. The decrease was primarily driven by reduced vessel shipment availability due to the freeze on the Great Lakes, resulting in a delayed start of the 2014 shipping season, as well as lower export and other spot sales. This decrease was partially offset by increased demand from two customers.
For the remainder of 2014, the demand for Cliffs' steelmaking raw materials in North America is expected to be supported by continued improvements in the labor market, construction activity, and motor vehicle production. Demand for steelmaking raw materials in China is anticipated to remain high, as Chinese officials remain committed to achieving their targeted real GDP growth rate of approximately 7.5 percent. However, increased seaborne supply could continue to put downward pressure on pricing for steelmaking raw materials.