Cliffs Declines After Morgan Stanley Downgrade
Cliffs fell 12 percent to $18.94 at 9:41 a.m. in New York, after earlier dropping 15 percent, the most intraday since Feb. 13. The shares have declined 51 percent this year, making it the year’s worst performer on the Standard & Poor’s 500 Index. Cliffs, based in Cleveland, plunged 20 percent on Feb. 13 after the company said it would cut its dividend and issue shares amid slumping global iron-ore prices and cost overruns at its flagship Canadian mine.
Analysts led by Evan Kurtz at Morgan Stanley in New York expect the price of the steelmaking ingredient to drop to $110 a ton as about 13 million tons of iron-ore pellet supply comes online in the North American Great Lakes region, a 60 million- ton market, they wrote in a note today. Iron ore traded at the Chinese port of Tianjin rose 0.2 percent to $137.40 a dry metric ton today, according to data compiled by Bloomberg from The Steel Index, a trade publication.
Kurtz downgraded his rating on Cliffs to underweight, equivalent to sell, from the equivalent of hold.
Sal Tharani, a New York-based analyst at Goldman Sachs Group Inc., upgraded his rating to hold from sell after the company’s actions shored up its balance sheet, he said in a note published today.
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