There's fresh evidence that the slumping U.S. steel industry is on the rebound – which is good news for Minnesota's Iron Range.
On Thursday Cliffs Natural Resources surprised Wall Street by reporting that the company made money in the first quarter and reiterated its plans to reopen both of its shuttered Minnesota taconite plants by the end of the year.
A share of Cliffs' stock would have earned you 62 cents for the quarter, the company says. That compares to a loss of $4.26 per share over the same period a year ago.
CEO Lourenco Goncalves says the first quarter numbers demonstrate the company's turnaround and says a recovery in the steel market has generated an appetite for the taconite pellets Cliffs produces.
Illegal dumping of foreign steel onto the U.S. market has dropped off since the federal government took steps to stop it, the Duluth News Tribune reports, noting that steel was selling for $400 a ton in December but for $520 this week.
Two reopenings planned
Cliffs plans to reopen Northshore Mining, which has facilities in Silver Bay and Babbitt, in May. Goncalves also repeated that United Taconite in Eveleth and Forbes will reopen by the end of the year.
MPR News notes that the CEO told investors a $65 million retooling at United Taconite will allow the plant to supply Cliff's biggest customer – Arcelor Mittal – with a custom made type of pellet. The Michigan plant that now provides Arcelor's "superflex" pellet will close later this year.
The News Tribune says Northshore Mining and United Taconite together employ more than 900 Minnesotans.
Stock price soars
The favorable earnings report caused a surge in Cliffs' stock price Thursday. It was up 25 percent by the close of trading, which Bloomberg reports is the largest one-day gain in the company's history.
Analysts at The Motley Fool say Cliffs' first quarter numbers are certainly a welcome change from the bad news that has plagued the iron ore and steel industries recently, but they also note the company is still carrying $2.5 billion in long-term debt that needs to be addressed.