CLF recent pricing

CLF, actually, isn't that complicated.

POSCO did the math before: 700 million, 10%, that's 7 billion. At $12.5 per share, they think it's worth it; at this level, if CLF doesn't want to negotiate, the message is clear too, $12.5 won't work, they have to pay more.

This situation feels quite familiar. When LBRT was at $11, it was exactly the same scenario. Either capital or the company itself set the price there. Later at $21, the company issued bonds at $34.5 and $50, meaning capital believed the price could go above $34.5.

So where is CLF's value midline? Personally, I think below $12.5, don't pay too much attention. Above is where it should be. But don't expect it to get rich overnight.

Before, a naive investor asked me if CLF would suddenly experience explosive growth.

I said no.

It's a slow bull. CLF isn't the story + hype type. The logic is very old-school, structural demand is there, gradually shifting the value midline upward. Losses slowly narrow, profits slowly increase. Can't go fast, but it's also not easy to go back down.

Interestingly, SCCO

These two are actually a bit interesting. CLF relies on the full industry chain, SCCO relies on ore grade. Different paths, but the underlying logic is the same: both feed on structural demand.

And to be honest, the non-substitutability of electrical steel, structural steel, etc., is a bit stronger than copper and aluminum. Many people don't really notice this. HDC is trending up, but the prices of related companies haven't really reflected this yet.

Macro? Actually, don't overthink it

Later, the Fed is likely to be Waller. Won't elaborate on that here.

A more important matter is: production costs are rising. The entire central axis of metal processing will definitely be pushed up. Who has pricing power near this central axis? Companies like CLF.

Cost increases look like bad news, but for them, it's actually good news. The ones who ultimately foot the bill are the downstream buyers.

Look at the relationship between semiconductors and downstream applications, the logic is exactly the same. The ecological niche determines who can pass on the costs.

CLF isn't the kind of company that gets people excited. But if you're willing to be patient, willing to wait for structural things to materialize slowly, it's a decent choice.

Below $12.5, I think it's a relatively low position. Whether to add, how much to add, that's between you and the market. But where the bottom line is, capital and the company have already told you.

If you understand, you can buy some; if you don't understand, don't touch it.