You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Our second-quarter numbers for revenue, net income, and EBITDA were all quarterly records.
They clearly demonstrate our operational and commercial success in integrating the two acquisitions into Cleveland-Cliffs as well as a sustainable steel environment, supported by strong and resilient demand for our products.
This being said, our Q2 record numbers: revenue of 5 billion; net income of 795 million; and adjusted EBITDA of 1.4 billion, should not be our all-time records for long.
With the lagged and fixed pricing mechanisms we have in place with our customers, we have enough visibility to be confident that these records should be broken again here in the third quarter.
Drilling down specifically on our adjusted EBITDA, the 1.4 billion performance represented a 165% increase over the past quarter, primarily due to increased steel pricing fixed-price contract improvements, favorable product mix, and higher volumes.
Unlike most of the American steel industry, we have been relatively well shielded from inflationary forces thus far due to our self-sufficiency in raw materials, namely pellets, and HBI.
More specifically, our overall cost per ton barely moved compared to the first quarter.
In the Steelmaking segment, we sold 4.2 million net tons of steel products, which included 33% hot-rolled, 17% cold rolled, and 30% coated, with the remaining 20% consisting of stainless, electrical, plate, slab, and rail.
Due to lighter automotive demand pool related to the chip shortage, we were able to sell more tons of higher-margin material into the spot market.
Direct automotive shipments were about 1.2 million tons during the quarter, about 300,000 tons less than what we anticipated back in March.
This contributed to an inventory build of about $300 million during Q2, which, along with rising receivables due to rising prices, produced another working capital build during the second quarter.
Our free cash flow generation will certainly be further increased in the third quarter.
We expect to generate 1.4 billion in cash from our expected 1.8 billion in adjusted EBITDA for the third quarter.
These numbers result from continued rise in prices on our HRC linked contracts and spot sales, offset by higher employee-related costs and the planned outage at our largest blast furnace, Indiana Harbor No.
Furthermore, we are increasing our full-year adjusted EBITDA guidance to $5.5 billion.
Our free cash flow expectation still includes minimal federal cash tax disbursement as a result of our NOL position.
Given our immense profitability so far this year, we have been able to effectively utilize our sizable NOL balance, and we'll continue to utilize it for the rest of the year.
With these NOLs rapidly being used, we expect to become a federal cash taxpayer again at some point either later this year or early next year.
Our main priority with this free cash flow continues to be the paydown of debt.
The level of free cash flow we are expecting has created a generational opportunity to completely derisk our balance sheet, and we are taking full advantage.
In the second quarter, we made open market bond repurchases and completely redeemed the remaining 400 million of our 2025 unsecured notes, the only bond we had that was callable this year.
Our debt-to-cap ratio is currently at a nine-year low.
And we have already repaid another 455 million in debt during just the first 20 days of July.
As the year progresses and into next year, we will be rapidly and methodically reducing our debt balance, and we expect to reach net debt zero sometime next year.
With that, I'll turn it to Lourenco.
The best way to understand the new Cleveland-Cliffs is by comparing Q2 results with Q1.
Our revenue line increased by $1 billion and our cost of goods sold increased by just $100 million.
The seamless and complete integration of both AK Steel and ArcelorMittal USA into Cleveland-Cliffs has generated a new and very efficient business model, geared toward value creation.
Demand for steel is very strong across all sectors, and strong demand supports strong prices.
Q4 2020 was supposed to be the peak for steel prices, then Q1 2021, and then again in Q2.
Well, we are in Q3, and the reality is demand is relentless.
Most of our customers are experiencing record profits and learning that higher prices are good for pretty much everyone in the supply chain.
Actually, some of the customers who were complaining earlier this year about rising steel prices then turned around and decided to accept the reality.
They cut deals with Cleveland-Cliffs at that time, and are now just plain happy.
Others probably will be unhappy for a long time.
Also, as new electric arc furnace capacity continues to be brought to operation in the United States and abroad, the notion that prime scrap is precious metal will be better understood.
Iron ore fundamentals are strong as well, keeping the price of pig iron imported by the mini views elevated, and also pushing up the pricing of steel offered by foreign sources.
Russia is restricting exports of ferrous materials, including pig iron, of which they are the largest exporter of to the United States.
China continues to say that they want to cut emissions, which they can do by either cutting steel production to reduce sinter usage or using more scrap or both.
With all that, the trend on the price of prime scrap is also upward.
Separately, investments toward decarbonization will need ROI, return on investment, unless you operate in Europe, in Japan, or in Canada.
Steel companies in these countries and continent are being awarded general subsidies and free money, like the grants.
Canadian and European steel producers are so happy to advertise as they get their gifts and handouts from their respective governments.
That's another compelling reason why imports need to be held in check, as other countries take advantage of a totally uneven playing field.
With their much worse environmental performance than ours in major government subsidies that we don't get here in the United States.
China is not our only problem, our so-called friends are bad, too.
While all of our relevant Q2 figures represent company records revenue: net income, adjusted EBITDA, I would add, we haven't reached our full potential yet.
Due to previously agreed upon sales contracts, so far this year, we have sold a significant chunk of our volume well below price levels that would make us comfortable.
Our most important commercial priority through the end of this year will be to improve these contracts.
We know the real value we provide to the clients, including, but not limited to, our ability to manage complex just-in-time requirements in several different highly specified products.
We also know the unique technological capabilities that we have and the limitations of others in the steel industry that cannot match what we do, particularly at the massive scale that we do.
Simply stated, it's time to be awarded a better return on our capital invested to serve these clients, and we are well underway to achieve that.
Being the largest supplier of steel by a lot to the automotive industry, we are obviously affected by the supply chain issues they have experienced, all related to things other than steel.
Nevertheless, our Q2 results were actually better than our guidance, among other reasons, because we were able to take advantage of the reduced demand from these customers and managed to divert automotive volume to spot buyers or to other contract clients willing to pay market-level prices.
When stated like that, it sounds simple.
But reorganizing both the melt schedules and deliveries of these materials was a challenge that our team did a great job overcoming during the quarter.
Even with all the difficulties in finding available rail cars, trucks, and truck drivers during the quarter, we were still able to increase our shipment volume in comparison to Q1.
One thing that should not be holding up anything any longer is COVID-19.
Brilliant scientists have developed not one, but several truly groundbreaking vaccines that would stop the virus and its tracks and any current variants.
But we need enough people taking the vaccines.
With the safety of our workforce always a top priority.
earlier this month, we instituted a companywide vaccination bonus program that offers a cash bonus of $1,500 to each vaccinated employee if the level of vaccination of their working sites achieved 75%.
If the level of vaccination of the site achieves 85%, the cash bonus paid to each employee of the site doubles to $3,000.
Upon announcement of the program, we saw an immediate uptick in vaccination rates.
And some of the locations are already at the first threshold, with two locations already at a second threshold of 85%.
Protection from the virus is just as important as any other safety mandates we have in any of our locations, and we are willing to spend real money to ensure each of our facilities reach herd immunity.
In order to meet current market demand, our assets need to be well staffed, and well maintained.
This process involves preplanned maintenance outages, including the one taking place at Indiana Harbor later in this quarter from September 1st to October 15th.
7 is the largest blast furnace in North America, and for reference, produced 33% more hot metal per day than our two blast furnaces at Cleveland works combined.
The outage includes repair to two BOF converters in the steel shop and a partial reline in several upgrades to the blast furnace.
Some of these upgrades are related to our ongoing work toward decarbonization, such as further enhancements to our ability to use massive amounts of both HPI SP stock and natural gas as supplemental reduction at Indiana Harbor No.
Another success story of the past quarter is our Toledo Direct Reduction plant.
We reached our nominal capacity within six months of start-up.
And thus far in July, we are producing at a 2.1 million tons annualized rate, well above nameplate of 1.9 million tons per year.
Our timing could not be better.
Prime scrap is scarce.
And every day the price of scrap goes up, our cost savings from HBI becomes more significant.
On top of that, we have actually used the vast majority of our internally consumed HBI in our blast furnaces, enhancing hot metal output, and allowing us to capture additional margin on incremental steel tonnage produced and sold to clients.
Along with the productivity benefits, this action alone reduced our implied carbon emissions by 163,000 tons during the quarter.
Direct reduction and degrade pets are critical to the future evolution of a clean and environmentally friendly steel industry.
Cleveland-Cliffs sees decarbonization as part of our license to continue to exist.
As you can see in our recently published sustainability report, we are well on our way to achieving our targets through the combination of natural gas usage, HBI production and internal usage, and carbon capture.
There's a lot of talk about hydrogen as a reduction in Europe, with little recognition that we already use hydrogen in the United States through the use of natural gas.
Natural gas composition is 95% CH4, methane, and 4% C2H6, ethane.
Natural gas is used in our blast furnaces as a partial replacement for coke.
That means we emit good old H20 when we reduce our iron ore.
And CO2 ambitions are cut by more than half when compared to reduction exclusively by coke or coke plus PCI.
Also, our direct reduction plant uses 100% of natural gas as a reduction.
The total amount of natural gas, we currently use in our eight blast furnaces and in our direct reduction plant eliminates the need for 1.5 million tons of coke per year, the equivalent of two coke batteries.
And we continue to explore and increase the use of natural gas throughout the entire footprint.
Actually, our direct reduction plant was designed and built to be able to use up to 70% hydrogen.
But in order to make hydrogen a viable reduction, serious cost improvements and breakthrough technical developments are still needed.
Europe does not have abundant natural gas, other than in Russia.
So they have embraced the hydrogen route, even with the current uncertainty surrounding the economical use of hydrogen.
That might not take them anywhere as far as emissions control, but is actually a great shortcut for free money and more subsidies from government to companies.
And we all know how these things end.
Replacing blast furnaces with AIF is not a solution either.
There are technical reasons.
No major steelmaking nation runs entirely on EAFs.
When producing flat-rolled steels, EAFs need a significant amount of virgin material, like pig iron, prime scrap, DRI, HBI, and even oxygen injection just to try to mimic the blast furnace BOF route.
In reality, even here in the United States, soon to achieve 75 participation of EAFs, we may be near a peak, particularly in further investments in direct reduction are not made.
Just don't count on Cleveland-Cliffs for that.
This ship has sailed when we acquired ArceloMittal USA and AK Steel, and successfully integrated both into a single unit company named Cleveland-Cliffs.
At this point, we are very comfortable using our degrade pellets to exclusively supply our plant in Toledo our blast furnace great pellets to supply our own blast furnaces.
To wrap up, Cleveland-Cliffs is doing well, actually, very well.
As of today, our leverage is already below one-time EBITDA.
And we expect to be at net debt zero sometimes next year.

user
expects third-quarter 2021 adjusted ebitda of about $1.8 billion and free cash flow generation of $1.4 billion.

assistant