Why ArcelorMittal Is The Most Important Customer For Cliffs’ U.S. Iron Ore Sales
ArcelorMittal is the largest customer for Cliffs’ U.S. iron ore pellet shipments, accounting for over 50% of the company’s U.S. iron ore pellet shipments in 2015. With Cliffs’ existing agreements with ArcelorMittal set to expire by January 2017, the company entered into a fresh ten year supply agreement with ArcelorMittal through 2026 earlier this week. As per the terms of the new agreement, ArcelorMittal will purchase up to 10 million tons of iron ore pellets from Cliffs annually, with a minimum annual purchase limit of 7 million tons. Assuming that ArcelorMittal purchases around 10 million tons annually, it will continue to account for over 50% of the shipments of Cliffs’ U.S. Iron Ore division (as shown below) and would maintain its position as the most important customer of the U.S.Iron Ore division, as well as the company as a whole.
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