Steel Mills

Cliffs swings to $242M loss in Q3, expects early 2025 demand rebound
Written by Ethan Bernard
November 4, 2024
Cleveland-Cliffs Inc.
Third quarter ended Sept. 30 | 2024 | 2023 | % Change |
---|---|---|---|
Revenue | $4,569 | $5,605 | -18.5% |
Net earnings (loss) | $(242) | $264 | -191.7% |
Per diluted share | $(0.52) | $0.52 | -200% |
Nine months ended Sept. 30 | |||
Revenue | $14,860 | $16,884 | -12.0% |
Net earnings (loss) | $(307) | $554 | -155.4% |
Per diluted share | $(0.64) | $1.08 | -159.3% |
Cleveland-Cliffs swung to a steep loss in the third quarter. However, it touted the recent closing of its acquisition of Stelco in its quarterly earnings report released on Monday and said steel demand should bounce back early next year.
The Cleveland-based steelmaker posted a Q3’24 loss of $242 million vs. $264 million of net income attributable to Cliffs’ shareholders a year earlier. Revenue declined nearly 19% to $4.57 billion in the same comparison.
“In Q3, weaker demand and pricing drove tighter margins, and ultimately led us to temporarily idle our Cleveland #6 blast furnace,” Cliffs’ Chairman, President, and CEO Lourenco Goncalves said in a statement on Monday.
SMU reported in September that the C-6 blast furnace at Cliffs’ Cleveland Works in Ohio would be placed on hot idle in October. (See here for update.)
Goncalves noted that Cliffs achieved its lowest unit cost since 2021. However, “that was not enough to offset the negative impact of two of our top four automotive clients who continue to underperform their own expectations.”
“Due to our high exposure to the automotive sector, Cliffs was more affected than our competitors,” he added.
The company shipped 3.8 million short tons (st) of steel in Q3, down 7.3% from 4.1 million st in the year-ago quarter. Q3 shipments comprised 36% hot rolled, 28% coated, 17% cold rolled, 4% plate, 4% stainless and electrical, and 11% other, including slabs and rail.
Stelco acquisition
On Friday, Nov. 1, Cliffs closed on its acquisition of Stelco Holdings. The $2.5-billion deal to buy the Hamilton, Ontario-based steelmaker was first announced in July.
“We are thrilled to have closed on the acquisition of Stelco last week. Stelco’s portfolio of business is very different from ours, with virtually no exposure to the automotive sector,” Goncalves commented.
He added, “Stelco’s low-cost, efficient assets will make us more resilient in times of underperformance from the automotive clients.”
Cliffs said its Q3’24 results do not include Stelco’s Q3 adjusted EBITDA of US$64 million and adjusted EBITDA margin of 13%.
Capex outlook for 2024-25
Cliffs has lowered its full-year 2024 expected capital expenditures range to $600 million to $650 million vs. previous expectations of $650 million to $700 million.
For 2025, Cliffs anticipates standalone capex (excluding Stelco) to be ~$600 million.
“For 2025, we’ve set a much lower capital budget, even after including the strategic projects that are expected to boost annual EBITDA by over $600 million once completed,” Goncalves said.
He commented that lower coal costs will bring a $70-million benefit next year.
Looking to demand, Goncalves said Cliffs expects steel demand to rebound in early 2025, “supported by a number of economic and political factors.”
“With Stelco’s assets and our cost reductions, we’re well-positioned to capitalize on this upswing and will be able to reduce acquisition debt quickly with healthy free cash flow,” he concluded.

Ethan Bernard
Read more from Ethan BernardLatest in Steel Mills

Steel Dynamics guides to more metal, more money in Q3
Steel Dynamics Inc. is bullish heading into the close of the third quarter, with all three of its operating segments tracking higher.

AHMSA opens doors to potential buyers as $1.3B asset auction nears
AHMSA is opening its doors to potential buyers to tour its steel plant and mining operations in northern Mexico in preparation for the next stage of its bankruptcy process: the auction of its assets.

USW seeks clarity on USS plans for Granite City Works
The United Steelworkers union has asked U.S. Steel to elaborate on its Granite City Works plans following reports that the steelmaker is ending processing at the facility.

Nucor maintains plate prices, opens October order book
Nucor aims to keep plate prices flat for a seventh straight month with the opening of its October order book.

ArcelorMittal Mexico to import from sister mills as it works to resume DRI production
ArcelorMittal has partially restarted operations at its direct reduction plant in Lazaro Cardenas, Michoacan. An explosion on Aug. 18 rocked the massive steelworks on Mexico’s Pacific coast, impacting production of direct-reduced iron (DRI).