The stock was down more than 7% to $2.50 at 11:30 am ET, as the company added that most of the 540 Northshore employees in Silver Bay, Minnesota, will be laid off, maintenance crews excepted, because of high inventory levels and the continued flood of cheap steel imports to the U.S.
“The historic high tonnage of foreign steel dumped into the U.S. continues to negatively impact the steel production levels of our domestic customers,” chief executive Lourenco Goncalves said in a statement.
This is the second time in four months that Cliffs shuts one of its Minnesota iron ore operations down.
This is the second time in four months that Cliffs shuts one of its Minnesota iron ore operations down. In August, the Cleveland-based company, which sought bankruptcy protection for its Canadian operations in January, halted its United Taconite processing facility, which will remain idled through the first quarter of 2016.
The miner will continue to operate Hibbing Taconite in Minnesota, as well as its Tilden and Empire mines in Michigan, at normal rates.
“The company will assess and adjust its production plans as market conditions improve,” Goncalves said.
The price of iron ore continues to plummet globally and in the U.S. because of oversupply and increasing worries that China’s falling steel production will erode demand and boost stockpiles.
Ore with 62% content delivered to Qingdao sank 4.5% to $45.58 a tonne on Tuesday, the lowest since the record on July 8, according to Metal Bulletin. The price bottomed at $44.59 for daily price data, dating back to May 2009.