Steel Mills

As Q1 loss balloons, Cliffs pledges to cut costs, streamline operations
Written by Michael Cowden
May 7, 2025
First quarter ended March 31 | 2025 | 2024 | % Change |
---|---|---|---|
Net sales | $4,629 | $5,199 | -11% |
Net earnings (loss) | ($495) | ($67) | -639% |
Per diluted share | ($1.00) | ($0.14) | -614.3% |
Cleveland-Cliffs Inc. gushed red ink in the first quarter, and pledged to stem the bleeding by idling inefficient, “loss-making operations” and increasing focus on its core automotive business.
Betting on a Trump bump
The Cleveland-based steelmaker also said it should benefit in future quarters from President Donald Trump’s trade policies.
“The Trump administration has shown strong support for both the steel and the automotive sectors, and Cliffs is uniquely positioned at the intersection of these two industries,” Cliffs’ Chairman, President, and CEO Lourenco Goncalves said in a statement released with earnings data after the close of markets on Wednesday.
“We have already arranged higher volume commitments with our automotive OEM customers,” Goncalves added.
He did not mention specific policies. That said, Trump in March adjusted Section 232 tariffs of 25% on imported steel to target US allies previously exempt from the duty. He has also threatened Section 232 tariffs on imported cars and car parts.
By the numbers
Cliffs lost $495 million in Q1’25, more than seven times the $67 million it lost in Q1’24 on revenue that fell 11% to $5.20 billion. The Q1’25 loss came after the company lost $447 million in Q4’24.
Cliffs said it had total liquidity of $3 billion as of the end of March. Long-term debt stands at $7.6 billion.
Cliffs recorded sales volumes of 4.14 million tons in Q1’25, up 5% from 3.94 million ton in Q1’24. That tracks with Cliffs’ previously stated goal of selling 16 million tons per year.
The problem? Average selling prices fell to $980 per ton in Q1’25, down nearly 17% from $1,175 per ton in Q1’24.
Weirton transformer project zapped
Goncalves said the poor showing stemmed from “underperforming non-core assets” and low-priced contract prices in late 2024 and early 2025.
“We are taking decisive action to streamline our operations and enhance efficiency. This will drive meaningful fixed-cost savings,” he added.
All told, idling facilities – from mines, to mills, to a plate-finishing plant – is expected to save the company $300 million annually, Cliffs said.
The latest cut: Cliffs stated it was “no longer deploying capital” toward a project to produce transformers at a previously idled tin plate mill in Weirton, W.Va.
The company announced the project to great fanfare in July 2024. Stopping it should reduce capital expenditures by $50 million. That’s a big part of how Cliffs plans to reduce 2025 capex from $700 million to $625 million.
That’s a lot of idlings
Cliffs confirmed to SMU on Friday that it planned to idle its compact strip mill in Riverdale, Ill.; its plate-finishing facility in Conshohocken, Pa., and its rail mill in Steelton, Pa. The company provided more details on those idlings on Wednesday.
Cliffs said in a presentation released with earnings that idling Riverdale would save it $90 million annually. The idling will allow it to push more business onto its mill in nearby Indiana Harbor.
Cliffs said the idling of Conshohocken was necessary in part because plate demand from Biden-era infrastructure initiatives “had not materialized as expected.” The company said most of Conshohocken’s work could be transferred to its plate mill in Coatesville, Pa. It expects annual savings of $45 million from the idling.
As for Steelton, Cliffs said it was idled in part because “customers prefer imported rail.” The company said some customers import more than 50% of their rail requirements from Japan’s Nippon Steel. Cliffs also said domestic competitors – likely a reference to Steel Dynamics Inc. and Evraz North America – have more modern equipment. Cliffs expects the Steelton idling to save it roughly $30 million per year.
Recall that Cliffs had already announced plans to idle the blast furnace, basic oxygen furnace, and continuous casting facilities at its mill in Dearborn, Mich. The company has said that it will transfer business from Dearborn to its Cleveland Works, where it plans to restart the idled No. 6 blast furnace.
Cliffs has also announced plans to fully idle its Minorca mine and to partially idle its Hibbing taconite mine. Both are on Minnesota’s iron range. The company said the idlings were necessary because of “excess pellet inventory” produced in 2024.
Calvert slab deal… a big loser
Additional savings are expected to come from what Cliffs characterized as an “onerous” slab contract with AM/NS Calvert – a sheet mill in Alabama that is a joint venture between ArcelorMittal and Nippon Steel.
Cliffs said the contract, which expires on Dec. 9, 2025, accounted for approximately 1.5 million tons of its production. The company said the contract was linked to Brazilian slab prices, which had historically correlated with US hot-rolled (HR) coil prices.
But Cliffs said that correlation had broken down because of tariffs, which resulted in Brazilian slab prices falling even as US HR prices rose. The company expects a “significant opportunity” to sell those tons at a higher profit margin once the contract expires. One caveat: That opportunity won’t be realized until 2026.
Note that Calvert plans to start up a new EAF soon, meaning it will require fewer third-party slabs.
Stelco stays home
Market participants have questioned whether Trump’s Section 232 tariffs on Canadian steel might have hurt the business case behind Cliffs’ $2.5-billion acquisition of Stelco, a Canadian sheet producer.
Cliffs said 70% of Stelco’s sales had previously been to the Canadian market and 30% to the US market. The company said it had “taken deliberate action” to shift 100% of Stelco’s sales to Canada.
Because Stelco is a low-cost producer, it should be able to compete successfully for business in Canada, Cliffs said. The shift has also allowed Cliffs to load business onto its US mills that had previously been served by imports from Canada.

Michael Cowden
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