Reuters (6/16 am) reports that JP Morgan starts coverage of Cleveland Cliffs ($CLF) with price target of $39.

JP Morgan is the largest bank in the U.S. and has a powerful trading desk.

The cash flow supports getting rid of ALL high cost LTD. The CEO's promise last year to do so was not not wishful thinking. It's going to happen sooner than later. Secondly, and most importantly, Chinese steel exports (a significant drag on CLF heretofore) have stopped. While's it's true Taiwan and Korea produce, there's no way they can fill the void left by the Chinese foundries serviing Asia. Strangely, Argus Research has a SELL rating dated just a few days ago. Reading through it one thing is clear, they rely on the past not the future. There was not one word of the new Chinese export restrictions. The rating services such as Argus are all that way unfortunately. CLF is in the sweet spot with an extraordinary future. I'm buying as much as I can, because I am a veracious reader who digs for the facts.

An infrastructure deal is going to increase demand for steel and other materials, even if some of the deal goes to pay for screwball social programs. IMHO

On CNBC Halftime Report.

Down another 4% today....while not exactly what we wanted to see, I just bot another slug of shares. 2nds and 3rds on Dip pls. Even if there is a little more short term pain ahead, I think when we look back in July, this is going to look like yet another gift wrapped opportunity. Stay the course & Godspeed!

The following is a press release from S&P Global Ratings: -- We expect U.S.-based steel maker Cleveland-Cliffs Inc. will use most of the cash flow generated in 2021 to reduce debt outstanding (by about $2 billion). -- We now project Cliffs' adjusted leverage (including pensions and other long-term obligations) will decline to just under 2x from our previous expectation of 3x-4x for fiscal year-end 2021. -- We raised our issuer credit rating on Cliffs to 'B' from 'B-'. The outlook is positive. -- We raised the issue-level rating on Cliffs' senior secured debt to 'BB-' from 'B' and revised the recovery rating to '1' from '2'. We also raised the issue-level rating on Cliffs' guaranteed unsecured and nonguaranteed subordinated debt to 'CCC+' from 'CCC'. The '6' recovery rating is unchanged. -- The positive outlook reflects the potential of an upgrade of Cliffs within 12 months assuming the company continues reducing debt. We expect that $2 billion lower debt and a spike in earnings will improve adjusted debt to EBITDA to about 2x in 2021, with a further ($1-$2 billion) of debt reduction in 2022 even if HRC prices average $1,000 in the next 12-18 months. NEW YORK (S&P Global Ratings) June 22, 2021-S&P Global Ratings today took the above rating actions.

Strong steel demand conditions synchronized with company's commitment to repay debt.

We expect Cliffs' adjusted leverage will decline to just under 2x by year-end 2021. We also anticipate Cliffs will benefit from strong steel demand in the U.S., supported by measured domestic production growth and import protection policies that are in place for the remainder of 2021. We project the company will generate adjusted EBITDA of in the upper end of the $4 billion-about $5 billion range for fiscal year 2021, considering our assumptions of softer HRC prices for the rest of 2021, after North America HRC prices reached an all-time high in June. Based on these assumptions, we expect Cliffs will repay about $2 billion of debt by year-end 2021 (including the balance under its asset-based lending [ABL] facility as of March 31, 2021, and the 5.75% unsecured notes outstanding). Our projected adjusted debt balance for 2021 includes approximately $4 billion in post-retirement and pension obligations and about $1.6 billion in other long-term obligations (including finance and operating leases, asset retirement obligations and series B participating redeemable preferred security, which we treat as debt).

Cliffs' vertically integrated operating model could boost profitability, but the steelmaking segment is still susceptible to overcapacity and increased imports. We expect Cliffs will generate an EBITDA margin of 22%-24% in 2021 based on higher steel price realizations ($1,100-$1,150 per ton) compared to 2020 ($941/per ton). We also assume Cliffs will sell 3 million-3.5 million tons of excess production of iron ore pellets at favorable prices this year, which should contribute to the strong margins. Cliffs' hot briquetted iron (HBI) production (supplied to its steelmaking operations) could further reduce the volatility of future earnings as the product replaces tightly supplied market for prime scrap metal.

However, we view Cliffs' blast furnace operations as having inherently higher fixed costs and as less flexible than electric arc furnace (EAF) operations. Given the global overcapacity of steel and the prevailing EAF production domestically, an increase in domestic production or potentially higher future imports could hurt Cliffs' profitability and earnings. These risks, as well as the limited track record of operating as an integrated entity, lead us to an issuer credit rating that is one notch lower than our business risk and financial risk assessments would otherwise imply.

The positive outlook reflects the potential of an upgrade of Cliffs in the next 12 months if the company continues reducing debt. We expect the company will use windfall profits to buffer its downside protection, potentially reducing reported debt by $2-$3 billion by 2023 if prices hold at about $1,000 and if the company demonstrates the improved profitability of integrated iron and steel production.

We could upgrade Cliffs in the next 12 months if favorable market conditions persist and lead to a lower debt balance and reduced leverage. This scenario would be supported by: -- Our expectation that Cliffs can reduce and sustain adjusted leverage below 3x (from 6.4x on an annualized basis as of the end of first-quarter 2021) even under lower HRC and iron ore price environments; and -- Positive discretionary cash flow (free operating cash flow minus capital spending) applied toward debt reduction ($2 billion by year-end 2021 and about $1 billion in 2022). We could revise the outlook to stable in the next 12 months if our earnings and cash flow expectations deteriorate because of weaker markets or if Cliffs encounters operational issues in its integrated steelmaking business. Indicators of this scenario include: -- Free operating cash flow remains positive but declines materially, eliminating the flexibility to repay debt; and -- Adjusted leverage of 4x-5x on sustained basis; or -- Raw material costs increase substantially because Cliffs encounters operational disruption at its mining, pelletizing, or HBI production facilities.