And last but not least, we have recently announced our public commitment to aggressively reduce our greenhouse gas emissions 25% by 2030.
On top of that, we also supply 1.5 million tons of automotive-grade blast to ArcelorMittal Nippon Steel in Calvert, Alabama.
Even with increasing tons from 3 million to 5 million, we actually reduced our percentage of participation in the auto sector from 70% as AK Steel stand-alone to 40% as the combined Cleveland-Cliffs, allowing us to benefit faster from higher market prices for steel.
We also supply 100% of our iron ore needs in-house, and that is extremely important.
With that and several other initiatives, we are well on the way to reach our synergy target of $150 million by the end of this year.
Additionally, once hydrogen becomes commercially available, our plant is already capable of using up to 30% of hydrogen as a partial replacement for natural gas with no equipment modification needs, and up to 70% with minor modifications, which would even further reduce emissions from the baseline.
6 blast furnace to make up for the lost Middletown production.
We currently have 10 blast furnace in our portfolio and are keeping between six and eight points in simultaneous operations.
Only as most liked of the recent steel price run-up positively impacted our fourth-quarter adjusted EBITDA performance of $286 million.
Due to how contract prices work and usually applies lagging mechanisms and the fact that we only controlled the AM USA assets for the last 23 days toward the end of the year, our steel profitability in the fourth quarter of 2020 has not benefited or improved from these strong prices just yet.
China has publicly stated their target of doubling EAF capacity from 100 million metric tons to 200 million metric tons over the next five years.
And the only method to achieve that was by using the 35% equity cost provision from the indenture of the notice.
The sole focus of issuing the small number of 20 million shares was to use this claw-back provision and retire the maximum amount possible of these high-coupon notes without paying a make-whole panel.
We also successfully placed $1 billion of unsecured notes, the lowest coupons we have ever achieved as a high-yield issuer, respectively, 4.625% and 4.875% for eight- and 10-year issue.
Finally, in January, we publicly announced our commitment to reduce greenhouse gas emissions by 25% by the year 2030, covering both the Scope one and Scope two emissions.
As for our results, our fourth-quarter adjusted EBITDA of 286 million represented 127% increase over last quarter and 158% increase over last year's fourth quarter.
In the steelmaking segment, of our 1.9 million net tons of shipments, we shipped 1.25 million net tons from the AK side and picked up the remaining 600,000 from our 23 days of ownership of AM USA.
We expect to more than double this amount in the first quarter with total shipments of approximately 4 million net tons.
Our shipments during the quarter were 44% coated, 22% hot rolled, 18% cold rolled, and 16% other steel, which includes stainless, electrical, slabs, plate, and rail.
Third-party pellet sales during the fourth quarter were about 2.0 million long tons which consists of approximately 1.6 million long tons sold to AM USA prior to the acquisition date.
Going forward, our external pellet sales volume should be 3 million to 4 million long tons per year, with the remainder of our output being used internally by our blast furnaces and direct reduction facility.
Our steel supply contracts are roughly 45% annual fixed price with resets throughout the year, and 55% HRC index-linked.
That latter piece further breaks down to about 40% on pricing lag, split between monthly and quarterly, with the remaining 15% on a spot basis that currently have lead times up to three months for hot-rolled and four months for cold-rolled, and coated products.
When we completed the AM USA acquisition, we upsized our ABL facility from 2 billion to 3.5 billion, which is currently more than fully supported by our inventory and receivable balances.
This has provided us with a sizable liquidity balance of 2.6 billion as of this week, of which approximately 850 million is earmarked for bond redemptions set to take place in March related to the capital markets transactions we completed earlier in February.
Our fourth-quarter capital expenditures of 147 million took into account spending for the AM USA assets during the last 23 days of the year and included $61 million related to the Toledo plant, where we have about 60 million in run-out spend going into 2021.
This is included in our 600 million to 650 million capital budget for 2021, which includes about 500 million in sustaining capex, as well as other small projects such as the new precision partners plant in Tennessee, walking beam furnaces at Burns Harbor, and the Powerhouse at Cleveland Works.
We are ready to make our market on the industry with our 25,000 employees all rowing in the same direction, and we can't wait to show you what we can accomplish.

Summary:
We expect to more than double this amount in the first quarter with total shipments of approximately 4 million net tons.
Going forward, our external pellet sales volume should be 3 million to 4 million long tons per year, with the remainder of our output being used internally by our blast furnaces and direct reduction facility.
This is included in our 600 million to 650 million capital budget for 2021, which includes about 500 million in sustaining capex, as well as other small projects such as the new precision partners plant in Tennessee, walking beam furnaces at Burns Harbor, and the Powerhouse at Cleveland Works.