Cleveland-Cliffs, one of the larger players on the Iron Range, saw profits decline in the third quarter as iron ore demand and prices fell.
Cliffs — the Cleveland-based company that owns United Taconite in Forbes and Eveleth, and Northshore Mining in Babbitt and Silver Bay — reported Wednesday that sales for the quarter were $556 million, down 25% from the same period a year ago.
Third-quarter sales volumes fell to 5.75 million long tons, from 6.48 million a year ago, while market prices also fell.
Income from continuing operations fell to $91.8 million, or 33 cents a share, from $199.8 million, or 64 cents a share, a year earlier.
"We believe the currently weak steel prices in the United States are temporary, and the cyclicality associated with our business should be largely mitigated as we start up HBI next year" in a plant the company is building in Toledo, Ohio, said CEO Lourenco Goncalves in a statement.
While he noted the quarter included operational achievements and progress on the "hot briquetted iron" (HBI) plant Cliffs is building in Toledo, Goncalves acknowledged that overall market conditions and once "premium" pricing had indeed softened.
"The most surprising event of the quarter was the unnatural drop in the pellet premium, which from August to September represented the largest month-over-month change in history," Goncalves said in a conference call with analysts.
But the company remains well-positioned with cash flow, he said. During the third quarter the company announced a regular dividend of 6 cents per share, as well as a special dividend of 4 cents per share.
Other companies also have reacted to the iron ore markets. U.S. Steel had issued downward guidance for the quarter (although it has since revised that guidance upward a bit). It also closed down one of its production lines at its Minntac taconite plant on Minnesota's Iron Range.
Cliffs has invested in Minnesota and Ohio significantly in recent years. In June, it unveiled $100 million worth of renovations and upgrades at its Northshore Mining operation in Silver Bay. And in May 2017, its United Taconite subsidiary started production at its new $75 million Mustang "superflux" pellet plant in Forbes.
Cliffs' Minnesota operations are expected to feed taconite to the new HBI plant in Toledo once that facility is complete.
Iron Range officials also are looking at Cliffs' activity surrounding Nashwauk.
In December 2017, it bought and leased 3,768 acres of land rich in iron ore in Nashwauk. The company hopes to one day mine and process that ore into a high grade of "direct reduced iron" or DRI that can be used in Toledo or converted into steel by third party customers using electric arc furnaces.
The land that Cliffs purchased is near the half-finished $1.9 billion former Essar Steel Minnesota project. Goncalves has said publicly that he would like for the state of Minnesota to award Cliffs the mining permits necessary so it could take over the old Essar site and project. It is one that has sputtered on and off for more than 12 years and remains a source of frustration to state officials.