I don't care what they are, CLF is supplying these to two Nucor plants, gave you the article earlier.
And yet after Q2 they stepped up and eliminated over $100 million of debt… look at performance, they have the resources available to exceed the demands ahead of them.
What I am talking about is the low silica pellet that CLF is supplying to Nucor's two plants that I provided you the press release on. Are those pellets they supplying to Nucor called Mustang, I don't know and really don't care, but the key here is the Nucor business is the key to CLF's future, all the other nat gas and electric furnace operations will just fall into CLF's lap.
The main contract on this low silica pellet was designed for Nucor, MT came into the picture afterwards.
Bad bet, bankruptcy is not determined by 70 million shares, it is determined by CLF's ability to service its debt and the $123 million bond buy back should tell your 70 million shares that they should cover. But guess what, there are not 70 million shares available for them to cover with. So my suggestion to you is to short some more and see what happens.
This is not correct, this pellet is designed to be used in a DRI conversion at the steel plant to be used in electric or gas fired furnaces. This is a NEW market for CLF in the US to capture the DRI market in the most economical way possible, it is a great move and the technology belongs to CLF!
A whole new market for CLF to go along with their current US market. Volumes will quickly pass the amount lost by shutting down the Canadian operations, with the main difference, they will be profitable!
Another integrated steel company that is finding out that supply their own iron ore is very expensive and they would be better off having CLF supply their ore with a JIT inventory supply chain. AKS realized this with Magnetation.
Also, I think Coronado Coal is the buyer and that $175 million they paid for the Logan County mine was half of the total amount they wanted to pay for all three mines.
Well, the impaired value is $100 million for both. My guess is for more, somewhere between $150 to $200 million as met coal has more value than thermal. The best thing these mines have is their low cost of operation and if they can get some union concessions, these mines can be profitable at the current prices for met coal.
The current trend in iron ore prices don't support this thesis. And as far as Essar, on a cost basis, they cannot compete with CLF's established mines and pellet operations. If iron ore stays below $60, Essar's operation will go the same way Magnetation went.
I would love to wake up tomorrow to CLF retiring $1 billion in debt, but that is not real. It appears that CLF wants to maintain $300 million in cash. So with the excess current cash, cash from continuing operations of the rest of the year, reducing inventories to their normal year end level of $200 million and any asset sale, CLF could very well retire over $1 billion in debt by the end of the year based on an average 35% discount on the unsecured bonds. The bottom line is that CLF's current debt levels are completely manageable.
I can only speculate what CLF should do, but I trust LG to know exactly what needs to be done because he knows much more than all of us put together. As I see it, the move to supply gas and electric furnace based steel companies in the US is the way to go. If CLF can get 30% of all these steel operations, they will double their current US iron ore production. Solving the DRI logistics problems will allow them to provide management services world wide which could provide them with more profits than their entire US operations.
With their new low silica pellets that can be easily processed to DRI pellets at the steel mill maybe the answer to all the problems. With Nucor on board and the operation is viable, it will open up the rest of the county to CLF.
The great thing is most of the ground work has been laid in this program and won't require a huge amount of investment by CLF. There is no reason why CLF can't achieve both of these goals at the same time.
I am keeping an eye on volume, when you see 10 million shares traded in a day, the next day the coal mine sale will be announced. I have given up on researching the news outlets, by the time it hits the media, it will be too late.
Low pay is a result of the high added cost of labor due to Obamacare, matching FICA tax, liability insurance and workman's comp. The end result is the worker sees $15 an hour to make $35,000 a year. During the downturn in housing, many of the legal workers stayed on unemployment and would refuse offers to go to work for $10 an hour as unemployment and cash jobs gave them more. Most of the illegals took the work these legals refused or went back to Mexico, none of them went on unemployment.
What we need to stop is this socialistic drain on wages and get back to being responsible to yourself.
Normally I would agree with this, but at 50 to 40 percent discount, they could retire most of their unsecured debt. That savings is hard to pass up and most of it can be paid for off half the cash they have on hand and the cash they will get off of inventory sales. Throw in a coal mine or two, rail systems and dock facilities in Canada, they should have enough cash to do it and be left with $900 million in secured debt that they can't start paying off for a couple years without interest penalties.
Sellers load up on their sales during the first hour of trading in their attempt to build a trend for the day. Wait and see if the buyers come back in in the second hour… Like to see the volume hold up and post a 8 million share day. Have yet to see a short covering, price has gone up, but no volume.
Here is the problem, our society is the problem. Growing up I started picking berries and beans when I was eight, mowing lawns when I was nine and trimming suckers out of orchards when I was 14. Now I am 61 and I still mow my own grass, move dirt with a shovel, lay rock and perform most of all my labor intensive jobs. When my kids were little and they wanted a bike, I just didn't buy it for them, I made them come out to the job sites on the weekend where they worked cleaning up the homes we had under construction. I paid them a lot and didn't make them work that hard. Had to supply them donuts for breaks and take them out to lunch, but it made them feel like they were working for that bike. In the end, I handed them the money they earned and they had to hand it over to the bike shop.
Today we just don't make our kids work and we now have a society of people that feel basic labor is below them and need the Hispanics to mow their grass. And this view has expanded to other jobs that most people don't like to do, drywall, insulation and roofing to name a few.
I used a mason from SC and he employed his extended family. One day he showed up on the job with several Hispanic masons and I asked him where is his family workers. He replied that his new masons work harder and more productive to the point it was cheaper to fire his family and support them rather than to work them.
We have made a solid move over 1 million units a year which covers the number of units lost each year due to tear downs and those lost to fire and other natural disasters. When you add population growth, housing needs to grow to 1.6 million units a year.