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25 November 2015

Cliffs Natural Resources stops Northshore operation

CliffsNaturalResources is the largest producer of iron ore in the US. But even such a significant company is forced to stop production facilities. On December 1 , 2015, a temporary closure of Northshore, located in Minnesota, is planned. This is not the first stop of the companies of the American company. In August, exploitation of GOK United Taconite was suspended. According to the preliminary schedule of simple enterprises, it will last until the end of the next quarter of the coming year.

The structure of Cliffs Natural Resources in the US includes 5 iron ore enterprises. Their annual production capacity in aggregate gives 31.9 million tons. Most enterprises produce pellets. Last year, 28.9 million tons of iron ore were supplied to consumers of products. The planned annual productivity of the GOKs preparing for a stop is 11.6 million tons. Last year the combines produced 10.2 million tons. The planned indicator of the company at the beginning of 2015 reached 22 million tons. After the adjustment, the level stopped at 20.5 million tons. However, in the light of the anticipated shutdowns of enterprises, the output of iron ore is unlikely to reach the plan.

Considering the reasons for the stops, the representatives of Cliffs talk about the decline in demand. American metallurgical plants continue to reduce the consumption of raw materials. Among the reasons mentioned is a decrease in the cost of raw materials in world markets. The world's leading corporations - Vale, Rio Tinto, BHP Billiton - are not going to limit production. The US steel sector is also adversely affected by the incredibly high volumes of inexpensive imported products. However, Lorenzo Goncalves, CEO Cliffs promises to return to operation the stopped capacity. It is only necessary to solve the problem of "dishonest" excess imports.

Representatives of AISI confirm the decline in the volume of steel produced in the US. On average, the level of capacity utilization decreased to 67%. In 2009 this is the minimum indicator. By mid-November 2015, steel smelting in the country reached 70.5 million tons. Compared with the same period last year, the indicators fell by 8.3%. However, the current crisis situation depends not only on the quantity and cost of imports. According to statistics of the customs service in September, 2.57 million tons of steel were imported into the USA. This indicator is 27.3% lower than last year. Over the 9-month period, the volume of imported products reached 28.03 million tons. Relative to last year's figures, the decline was 5.1%.

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