Cleveland-Cliffs Inc. CLF stated that it will establish a new electrical distribution transformer production plant in Weirton, WV. This strategic investment aims to alleviate the significant shortage of distribution transformers that is currently hindering economic growth across the United States.
Cleveland-Cliffs will repurpose its Half Moon Warehouse in Weirton to produce three-phase distribution transformers, which are used in electric power distribution systems. The total capital investment for this project is $150 million, with $50 million to be provided by the state of West Virginia through a forgivable loan. The plant is expected to begin operations in the first half of 2026. The U.S. Department of Energy’s recent efficiency standards for distribution transformers support the long-term viability of this investment by promoting the use of highly efficient American-made Grain Oriented Electrical Steel (GOES).
This investment will create reemployment opportunities for 600 USW-represented workers from the idled Weirton tinplate mill. The new plant will increase demand for American-made GOES, which is produced exclusively by Cleveland-Cliffs in the United States at its Butler Works steel mill in Butler, PA. This is expected to lead to increased GOES production at Butler Works, offering potential employment growth for the UAW-represented workforce in Butler. The Weirton plant will also utilize stainless and carbon steel produced by Cleveland-Cliffs’ facilities in Ohio, Michigan and Indiana.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. price-consensus-chart | Cleveland-Cliffs Inc. Quote
Cleveland-Cliffs underscored the crucial role of distribution transformers in maintaining and expanding America’s electric grid. The company noted that the shortage of transformers, exacerbated by the growing adoption of Artificial Intelligence across various sectors, will significantly increase electricity consumption. CLF's vision for Weirton is to develop a center of excellence for transformer manufacturing, providing well-paying, middle-class jobs to skilled workers and supporting the country’s electrical infrastructure needs.
The company also highlighted Weirton's growth potential, citing its existing infrastructure and highly trained workforce. Cleveland-Cliffs expressed gratitude to the governor justice for advancing this critical project and to the West Virginia Department of Economic Development for the $50 million forgivable loan. The company also acknowledged the support from the Weirton community and regional officials.
United Steelworkers praised the investment, stating that it would provide significant employment opportunities for skilled Steelworkers. It emphasized that the new plant will build on Weirton’s proud steelmaking legacy and establish the region as a manufacturing hub for transformers critical to U.S. economic and national security.
Shares of CLF are down 9.7% in the past year compared with a 7.9% fall in its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, Eldorado Gold Corporation EGO and Kinross Gold Corporation KGC. Carpenter Technology, Eldorado Gold and Kinross sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.44, indicating a year-over-year rise of 289.5%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 119.6% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.21, indicating a year-over-year rise of 112.3%. EGO’s earnings estimates have increased 11% in the past 60 days. EGO beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The stock has rallied 50.2% in the past year.
The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 57 cents, indicating a rise of 29.6% from the year-ago levels. KGC beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 80.2% in the past year.
Buy 5 Stocks BEFORE Election Day
Biden or Trump? Zacks is releasing a FREE Special Report, Profit from the 2024 Presidential Election (no matter who wins).
Since 1950, presidential election years have been strong for the market. This report names 5 timely stocks to ride the wave of electoral excitement.
They include a medical manufacturer that gained +11,000% in the last 15 years… a rental company absolutely crushing its sector… an energy powerhouse planning to grow its already large dividend by 25%... an aerospace and defense standout that just landed a potentially $80 billion contract… and a giant chipmaker building huge plants in the U.S.
Don’t Wait. Download FREE >>Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Eldorado Gold Corporation (EGO) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
