- Cliffs Natural Resources (CLF +8%) enjoys a boost after China cut interest rates, paring this week's losses racked up after its announced retreat from Canada's Bloom Lake mine.
- But Wells Fargo notes that China’s steel production has slowed this year, which could be bad news for CLF if it continues; the firm estimates incremental iron ore supply outpacing incremental steel production by 3:1 over the next several years, weighing on pricing that is already at five-year lows.
- The point also points to other looming negatives: U.S. iron ore contract resets in 2015, potentially lower U.S. coal contract pricing in 2015, and the potential for strained cash flows which could put the dividend at risk.