Cleveland-Cliffs Applauds DOE’s Final Transformer Efficiency Standard Rule

Rhea-AI Summary

Cleveland-Cliffs Inc. (CLF) praises the Department of Energy's final transformer efficiency standard rule, ensuring the use of Grain-Oriented Electrical Steel in their markets. The revised rule recognizes the significance of GOES and Cleveland-Cliffs' steel plants in supporting the U.S. electric grid. Collaboration with the UAW led to changes in the rule, securing Cliffs' ability to produce efficient GOES in the U.S. This development is expected to boost demand for GOES, potentially leading to plant expansions and job opportunities.

Market Research Analyst

The DOE's final transformer efficiency standard rule is a positive development for Cleveland-Cliffs, as it reinforces the company's market position in the Grain-Oriented Electrical Steel (GOES) sector. The acknowledgement of GOES's importance in the U.S. electric grid underlines the strategic value of Cleveland-Cliffs' operations in Butler, PA and Zanesville, OH. With the anticipated increase in demand for GOES, Cleveland-Cliffs may experience growth in both revenue and market share. This could potentially lead to future investments and plant expansions, which would have a ripple effect on employment and local economies. Investors should monitor the company's capital expenditures and the roll-out of this rule, as they could signal a strengthening of Cleveland-Cliffs' competitive advantage in the steel industry.

Energy Sector Analyst

The revised DOE rule highlights a shift away from Amorphous Metal towards GOES, which is a significant material for the manufacturing of distribution transformers. This decision has implications for the energy sector, particularly in the context of supply chain resilience and domestic production capabilities. For Cleveland-Cliffs, this could mean enhanced stability and a reduced risk profile in the face of global supply chain uncertainties. The company's focus on GOES production aligns with national interests in energy infrastructure security, potentially leading to long-term contracts and partnerships. Energy investors should note the strategic positioning of Cleveland-Cliffs within the industry and consider the broader implications of energy policy changes on the company's performance.

Labor Economist

Cleveland-Cliffs' announcement that the DOE rule will likely lead to increased employment opportunities is significant from a labor economics perspective. The maintenance of 1,500 jobs and the potential for new ones due to plant investments contribute positively to the local job market and can drive economic growth in Butler, PA and Zanesville, OH. This development could also strengthen the bargaining position of the United Auto Workers (UAW) and enhance labor relations. While the direct impact on the stock market may not be immediate, the long-term benefits of a stable and skilled workforce can lead to improved productivity and profitability for Cleveland-Cliffs, which in turn could have a positive effect on investor sentiment.

CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) today applauded the Department of Energy’s (DOE) final transformer efficiency standard rule that will provide for the continued utilization of Grain-Oriented Electrical Steel (GOES) in virtually all of Cliffs’ current distribution transformer end markets.

With this revised rule, the DOE acknowledged the fundamental importance of GOES and the essential role played by Cleveland-Cliffs steel plants in Butler, PA and Zanesville, OH in effectively sustaining the functionality of the U.S. electric grid. Cleveland-Cliffs and the United Auto Workers (UAW) worked collaboratively to educate the DOE on the shortcomings of the originally proposed distribution transformer rule and the danger of relying on Amorphous Metal, which is produced in very limited volumes and exclusively from imported materials.

Lourenco Goncalves, Cleveland-Cliffs’ Chairman, President and Chief Executive Officer said, “We are grateful that the U.S. Department of Energy (DOE) was open to the feedback provided by Cleveland-Cliffs and our clientele of transformer manufacturers, and adopted major changes to the originally proposed transformer efficiency rule. The final rule ensures Cliffs’ ability to continue producing highly-efficient GOES in the United States. Once this rule is enacted, we expect to actually see an increase in demand for our GOES, opening the possibility of future investments and expansion of our plants in Butler, PA and Zanesville, OH.”

Cleveland-Cliffs currently employs 1,500 workers in Butler, PA and Zanesville, OH. Following the issuance of this rule, Cleveland-Cliffs can confidently make investments that will not only sustain these good-paying middle class jobs, but also increase the opportunities of employment for its skilled UAW-represented workforce.

About Cleveland-Cliffs Inc.

Cleveland-Cliffs is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, Cliffs is also the largest manufacturer of iron ore pellets in North America. The Company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. Cleveland-Cliffs is the largest supplier of steel to the automotive industry in North America and serves a diverse range of other markets due to its comprehensive offering of flat-rolled steel products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs approximately 28,000 people across its operations in the United States and Canada.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240403104080/en/

MEDIA CONTACTS:

Patricia Persico

Senior Director, Corporate Communications

(216) 694-5316

INVESTOR CONTACT:

James Kerr

Director, Investor Relations

(216) 694-7719

Source: Cleveland-Cliffs Inc.

What is the ticker symbol for Cleveland-Cliffs Inc.?

The ticker symbol for Cleveland-Cliffs Inc. is CLF.

What did the Department of Energy announce regarding transformer efficiency standards?

The Department of Energy announced a final rule that supports the use of Grain-Oriented Electrical Steel (GOES) in Cleveland-Cliffs' distribution transformer end markets.

How many workers does Cleveland-Cliffs employ in Butler, PA and Zanesville, OH?

Cleveland-Cliffs currently employs 1,500 workers in Butler, PA and Zanesville, OH.

What impact does the revised rule have on Cleveland-Cliffs' operations?

The revised rule ensures Cleveland-Cliffs' ability to continue producing highly-efficient GOES in the United States, potentially leading to increased demand and future investments.

Who collaborated with Cleveland-Cliffs to advocate for changes in the transformer efficiency rule?

Cleveland-Cliffs collaborated with the United Auto Workers (UAW) to educate the DOE and advocate for changes in the transformer efficiency rule.