The head of Cliffs Natural Resources Inc. was preparing for a “worst-case scenario” next year. Instead, he got Donald Trump.
Cliffs, the world’s best-performing raw materials producer this year, will probably generate “a lot” of cash, with which it will pay down debt, Chief Executive Officer Lourenco Goncalves said. He assigned President-elect Trump’s focus on infrastructure building and a crackdown on unfair trade as reasons his company and the steel industry are poised for more good times.
Shares of the Cleveland-based company almost quadrupled this year through early November amid signs of improving demand and successful U.S. trade cases against steel imports, which helped boost domestic steel prices. With Trump pledging to spend $1 trillion on infrastructure and to further clamp down on trade cases against countries including China, the shares have surged an additional 69 percent since the election.
“If Mr. Trump implements a portion — he doesn’t need to implement everything — of what he is promising, not only will the country be a lot better after these things are implemented, but businesses like Cliffs and all steel mills in the United States will benefit very much,” Goncalves said in an interview Thursday.
The stock fell 0.2 percent to $10.37 in New York on Thursday. Shares have surged 556 percent this year, the best performance on the Bloomberg World Iron/Steel Index of 75 companies and the 455-member Bloomberg World Basic Materials Index.
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