Cliffs Natural Resources Inc (NYSE: CLF) is having a strong day in the market today as investors realize that the company is well-positioned to make waves in the iron ore industry ahead. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:30), CLF is trading at $7.45 per share after a gain of $0.35 per share or 4.93% thus far today.
CLF Has A Unique Advantage In The Great Lakes Area
One of the big factors that has investors so excited about Cliffs Natural Resources is that the company has a unique competitive advantage, particularly in the Great Lakes area. You see, the company already has operations steady, and fine tuned on a financial basis. At the moment, they are the only company in the area that does.
Moving forward, this will likely remain to be the case. After all, due to heavy winters and the complexity of construction that is needed in order to operate a competing business in the area, costs would likely be too high for any newcomer to want to move forward considering the question of profitability.
This creates a unique competitive advantage for CLF. Because they are the only company in the Great Lakes area that is operating this type of business, they have a bit of a price advantage above other companies serving customers in the Great Lakes area. After all, iron ore heavy and expensive to ship. However, being right around the corner cuts the cost for customers in their area.
CLF Has A Quality Advantage
One of the big problems facing the industry at the moment has to do with quality. At the moment, the United States is importing massive amounts of steel from outside of the country. Unfortunately, while this steel is relatively cheap, the quality of the product reflects the price.
However, more and more, we’re starting to see a shift toward quality over price. When it comes to quality materials, Cliffs Natural Resources is among the top in the industry. This creates yet another opportunity for the company.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on CLF. In particular, we’re interested in following the company as its key advantages in the iron ore industry start to show their true value. Nonetheless, we’ll continue to follow the news and bring it to you as it breaks
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