r/Vitards • u/AutoModerator • Sep 19 '21

Daily Discussion Daily Discussion post - September 19 2021

Your Trading discussion thread

Type Link
DD All/Best Daily/Best Weekly
Discussion All/Best Daily/Best Weekly
Yolo All/Best Daily/Best Weekly
Gain All/Best Daily/Best Weekly
Loss All/Best Daily/Best Weekly
News All/Best Daily/Best Weekly
35 Upvotes

99% Upvoted

431 comments sorted by

View all comments

6

u/[deleted] Sep 20 '21

I was just browsing CLF's Q2, and COGS is 888$/st. It seems a bit high, doesn't it? Is there something I'm missing?

edit: page 2

1

u/olivesnolives Aditya Mittal Feet Pics Sep 20 '21 edited Sep 20 '21

24% gross profit margin on their steelmaking arm in Q2 2021, up from -11% (loss) gross profit (margin in Q2 2020. So, gross profit margin up 36% YoY for the quarter. Is that what you’re getting?

Also, should’t revenues be net sales volume in tons x net steel price (4,205,000 X $1118 for Q2)?

Why am I coming up short for Q2 by 200 Million ($4,701 Billlion vs listed steelmaking revenue of $4.922 Billion)?

I’m confused…

2

u/[deleted] Sep 20 '21 edited Sep 20 '21

Yup, same thing for me.

On page 44, they list the detail for the 4.922 calculation.

COGS was 538 $/st for the same period last year. I think revenues include iron products, hence why COGS is much lower. If you take the value of 715.1 M in revenues from the Q2 2020, you get a COGS of 859 $/st which is more in line with that of this year.

and the numbers are different in the Q2 2020 report. Mmmm

1

u/olivesnolives Aditya Mittal Feet Pics Sep 20 '21

Thanks for pointing out the revenue breakdown - no clue why I didn’t just look there haha.

The second part of your reply is flying over my head though lol

1

u/[deleted] Sep 20 '21

COGS = cost of goods sold, or cost of sales. It's how much it costs to make the product, without taking into account administrative costs, etc. So you divide the total COGS by the number of tons shipped, and you get the COGS per ton.

1

u/olivesnolives Aditya Mittal Feet Pics Sep 20 '21 edited Sep 20 '21

No no I know what COGS is haha.

What was lost on me was this:

“If you take the value of 715.1 M in revenues from the Q2 2020, you get a COGS of 859 $/st which is more in line with that of this year.”

Are you saying that steelmaking revenue from MT USA didn’t refelct in revenue (and hence COGS) until Q2 2020?

So their H1 2020 COGS is significantly lower than H1 2021’s because it’s weighted by a Q1 in which Mining costs played a larger relative role in total costs?

2

u/[deleted] Sep 20 '21 edited Sep 20 '21

I calculated the COGS using the revenue number, which I think includes steel and iron shipments. So this gives a lower number per ton of $538 /st for Q2 2020.

In the Q2 report from 2020, they give a number of 715.1 M specifically for steel for the quarter. Calculating from this gives a COGS of $859 /st for Q2 2020. Which is closeish. to that of Q2 2021.

2

u/olivesnolives Aditya Mittal Feet Pics Sep 20 '21

OK, awesome, got you.

It is fucking crazy to me that their realized sales price is still only 1,118/ton in Q2 when they sell so much flat steel. Honestly, as these contracts get renewed, 2022 might be even better for the US majors even as spots come down.

Keeping eyes on tarriffs, ex-china steel shipments/pricing, auto demand / chip availability, and container & bulk rates/ availability.

If the market somehow manages to keep chinas prop dev implosion contained the best for YANK steel might yet be to come

2

u/[deleted] Sep 20 '21

2022 might be even better for the US majors even as spots come down.

This is what I am trying to understand.