Cliffs posts Q3 loss, but sees upside in slab contract exit and auto deals

Cleveland-Cliffs Inc. pointed to signs of recovery in its latest quarterly earnings report on Monday. Improved automotive volumes and a better product mix drove sequential gains, but the steelmaker’s financials continued to bleed red in the third quarter.

Q3 results

The Cleveland-based company cut its Q3’25 net loss of $251 million by almost half from the previous quarter despite a 4.1% sequential decline in sales.

Revenues of over $4.7 billion showed a 3.6% year-over-year rise, while the quarter’s net loss was comparable to the Q3’24 loss of $244 million.

Steel shipments totaled 4,029,000 short tons in Q3’25. Hot-rolled sheet comprised 37% of volumes, followed by coated sheet at 15%, cold-rolled sheet at 15%, plate 6%, stainless and electrical at 4%, and 9% other (including slabs and other steel products).

Although down 6.1% from the prior quarter, total shipments showed a 4.9% increase over Q3’24 levels.

Cost discipline helped. Cliffs reiterated a target of roughly $50/st of unit cost reduction versus 2024. It also trimmed full-year capex guidance by $75 million to $525 million.

Recovery in automotive

Cliffs Chairman, President, and CEO Lourenco Goncalves said Q3’25 marked “a clear sign of demand recovery for automotive-grade steel made in the USA.” He credited the turnaround to the “new trade environment implemented and enforced” by the Trump regime.

Automotive made up 30% of Q3’25 steelmaking revenue, with shipments rising roughly 10% from the prior quarter. Auto tonnages were the highest since Q1’24, the company said. Another 29% of steelmaking revenue came from the infrastructure and manufacturing markets, 29% from distributors and converters market, and 13% from sales to other steel producers.

Cliffs confirmed earlier reports that it has signed multi-year, fixed-price automotive contracts with multiple OEMs. It aims to lock in steel volumes and capture more import market share.

Trade and the slab drag

Cliffs said tariffs and tighter trade enforcement are shifting sourcing back to North America.

It also pointed to a coming tailwind: the expiration of an onerous third-party slab contract that has weighed on margins. The contract, which runs through Dec. 9, was tied to Brazilian slab pricing and represented roughly 1.5 million short tons annually. Its expiration should free up higher-margin selling opportunities in 2026, management said.

MoU with unnamed global steelmaker

The company also executed a memorandum of understanding on Sept. 17 with a major global steel producer. The unnamed steelmaker seeks to leverage Cliffs’ US footprint and trade-compliant operations. The deal could be “highly accretive,” according to Goncalves.

A formal announcement could come by year’s end or in Q1’26, with a potential closing in 2026.

Pivot to rare earths

Cliffs additionally says it is refocusing on rare earth minerals at its upstream mining assets.

Two sites, one in Michigan and the other in Minnesota, show the most potential based on geographical surveys indicating key rare-earth mineralization, Goncalves said. The company is undertaking technical and economic work to evaluate extraction.

It framed the effort as aligned with US policy to secure critical-material independence. Goncalves said the company intends to be part of the solution to reduce reliance on foreign suppliers.