CLF Receives $500 Million DOE Support for Middletown Works Upgrade

Cleveland-Cliffs Inc. CLF has announced a $1 billion investment to modernize its Middletown Works facility in Ohio, supported by a $500 million award from the U.S. Department of Energy (“DOE”). Under the revised framework, Cleveland-Cliffs and the DOE will each fund $500 million of the project. The investment is expected to be deployed over the next four years while maintaining uninterrupted steel production at the facility. 

The project represents a rescoping of the company’s previously planned decarbonization initiative at Middletown Works. Cleveland-Cliffs determined that the original project, which involved replacing the existing blast furnace with a hydrogen-ready direct reduced iron plant and electric melting furnaces, was no longer commercially viable because customers were unwilling to pay a premium for lower-carbon steel. The revised plan instead focuses on improving the efficiency and productivity of the existing coal-fired blast furnace. 

Key investments will include rebuilding and upgrading the plant’s main blast furnace, installing advanced material-handling infrastructure and deploying artificial intelligence-enabled process-control technologies.  

The project will also include an on-site facility to convert steel mill process gases into electricity, while follow-on investments are expected to convert industrial byproducts into materials for concrete used in regional infrastructure. 

The investment is expected to begin in the coming weeks, with the blast furnace rebuild targeted for completion in the first quarter of 2030. The project is expected to protect approximately 2,300 jobs and support more than 1,500 workers at peak construction, including local union building trades. Middletown Works is a key supplier of automotive-grade steel and serves customers across the automotive, heating and cooling, appliance and steel-distribution industries. 

Per CLF, the investment will strengthen Middletown Works as a premier domestic steelmaking facility by improving operating efficiency, maintaining high-quality steel production and reinforcing the U.S. steel supply chain.

The company views the project as a significant reinvestment in its Ohio operations and an important step toward securing the facility’s long-term competitiveness while supporting American manufacturing and employment. 

Price Performance of CLF

Shares of CLF are up 7.4% over the past year compared with the industry’s 65.1% rise.

Image Source: Zacks Investment Research

CLF’s Zacks Rank & Key Picks

CLF carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Worthington Steel, Inc. WS, Carpenter Technology Corporation CRS and Avient Corporation AVNT. WS currently sports a Zacks Rank #1 (Strong Buy), while CRS and AVNT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for WS’ current-year earnings is $3.40 per share, implying a 52.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 13.8%.

The Zacks Consensus Estimate for CRS’ current fiscal-year earnings is pegged at $13.08 per share, implying a 21.6% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.4%.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.20 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research