Why Cleveland-Cliffs Stock Jumped on June 16
Shares of integrated steel maker Cleveland-Cliffs (NYSE: CLF) rose nearly 12% in the first half-hour of the trading day on June 16. Although the gains didn't hold, by roughly 3 p.m. EDT, the stock was still higher by around 9%. There was no news here, but there were some notable rumors that left investors feeling upbeat about the company's future.
According to "people familiar with the situation," the White House is working on a $1 trillion infrastructure spending plan. As one of the largest primary steel producers in the U.S. market, Cleveland-Cliffs' steel mills would see extra demand. However, the integrated company is also one of the largest producers of iron ore in North America.
Although it uses the iron ore it produces in its own mills, it also sells this vital steel building block to other mills. Thus, it wouldn't only benefit from increasing end-market demand for its own mills, but also from a potential uptick in demand within its mining operations as other mills see increased demand, too.
Source Fool.com
