Metal output has rebounded along with the restoration in automotive manufacturing this quarter, Cleveland-Cliffs CEO Lourenco Goncalves told CNBC Monday.

U.S. automakers are sprinting to re-stock showrooms and get back again on production routine just after vegetation ended up shut down before this yr as the region took motion to slow the distribute of a novel coronavirus.

“We have been by means of a really worthwhile quarter and quite solid in phrases of the recovery of demand from customers specially in automotive,” he stated in an overall look on “Closing Bell.”

The U.S. economy immediately fell into a economic downturn as corporations closed up and unemployment shot up throughout the country, but autos demand from customers, substantially like need in the housing industry, has been one particular of the sudden stronger parts in the financial restoration.

Plants of Detroit’s Significant Three automaker are now functioning at around full-speed to get back again on production program and supply new cars and trucks to dealerships as the vacation season ways. SUVs and pickup truck product sales have picked up particularly effectively among client buys.

Cleveland-Cliffs is the major U.S. producer of iron ore pellets, which are applied in the manufacturing of steel. The Cleveland, Ohio-dependent organization introduced Monday it would acquire the U.S. property of ArcelorMittal SA, the world’s world’s largest steelmaker, for about $1.4 billion. The acquisition follows Cleveland-Cliffs’ $1.1 billion purcahse of AK Metal in December.

The steelmaking market experienced its worst downturn sinec the 2008 monetary disaster as demand and prices for the item plummeted from the factory closures.

“Cleveland-Cliffs has a enormous exposure to automotive and that influenced us very critically during the next quarter,” Goncalves claimed. “When automotive shut down in this country, we were forced to reduce our output” but “Q3 has been a absolutely distinctive tale.”

North American automobile production is down 2 million autos from this time past yr in section for the reason that buyer desire is outpacing the time it will take to get new vehicles from the plants to showrooms, according to Charlie Chesbrough, a senior economist at Cox Automobile.

When automakers report September U.S. car gross sales Thursday, analysts estimate that the annualized product sales speed will leading the price in August, which came in at 15.2 million cars. That number is up from an annualized income level of 8.6 million automobiles in April, when the market hit a pandemic-induced bottom.

Overall product sales for the month of September are forecast to come in at 1.29 million models, which would be a dip from 1.33 million units offered previous month and a slight increase from the 1.28 million models a yr ago.

Shares of Cleveland-Cliffs rallied 11.6% in Monday’s session to close at $6.56.