Cleveland, Ohio-based Cliffs Natural Resources announced on Thursday their updates for their 2011 expected results and the 2012 outlook.
The US Iron Ore business segment is expecting poor results with a rate of about US$120 per ton during Q4 -- well below their expected rate of US$135-US$140. This can be attributed to retroactive pricing adjustments recorded for specific contacts. The US Iron Ore 2012 outlook is at a rate of US$115-US$125 due to various contract provisions, lag-year adjustments and pricing caps and floors contained in certain supply agreements.
The Eastern Canadian Iron Ore business segment is expecting poor results in its sales volume, being down 600,000 tons to 7.4 million tons compared to their outlook of 8 million tons. This downturn can be attributed to lower pellet sales volume resulting from operational challenges at Wabush Mine. It has also been reported that the revenue per ton will be slightly lower than previous expected (US$160-US$165). The Eastern Canadian 2012 outlook is to have sales volume up to 12 million tons with a revenue per ton outlook of US$135-US$145.
In Cliffs' Asian Pacific Iron Ore business segment, the expectation is pessimistic with the expected sales volume down from 8.8 million tons to 8.6 million tons. The 2012 outlook for the Asian Pacific Iron Ore business segment is to have 11 million tons in sales volumes.
The North American Coal business segment had optimistic expected results with Cliffs' Pinnacle Mine generated strong results in the fourth quarter, with production of over 600,000 tons of low-volatile metallurgical coal expected to be reported. In addition, Oak Grove Mine achieved year-end inventory of approximately 1.9 million tons of raw coal (or 740,000 tons of clean coal equivalent) in the Q4. The 2012 outlook for the North American Coal business segment is sales and production volume of 7.2 million tons and 6.6 million tons, respectively.
Cliffs Natural Resources will release their official Q4 and full year results on February 15, 2012.