Market Segment
July 23, 2026
Goncalves: Cliffs in no rush on POSCO deal or asset sales
Written by Michael Cowden
Cleveland-Cliffs President and CFO Celso Goncalves said no deal was imminent between the company and South Korean steelmaker POSCO because of disagreements over valuation.
The Cleveland-based steelmaker also wants more for assets it has said it was looking to sell.
Those include its hot-briquetted iron (HBI) plant near Toledo, Ohio, as well as Ferrous Processing & Trading (FPT), a scrap business it acquired in 2021, Goncalves said during Cliffs’ Q2 earnings call on Thursday.
“One thing that has become increasingly apparent through the multiple processes that we’ve run is that prospective counterparties approach discussions with the assumption that Cleveland-Cliffs was under pressure to transact,” he said.
Such assumptions stand at odds with how Cliffs see things. “We went into these processes with the backdrop of foreign companies paying enticing multiples for US industrial assets,” Goncalves said. “So far, the offers that we have received related to these processes have fallen short of our value threshold.”
Take the HBI plant, for example. It has “proven substantially more valuable” than anticipated in a strong US market (and amid several outages). “HBI, used in blast furnaces, juices our iron-making capabilities where we are constrained. And we have been able to push more volume through our mills as a result,” he said.
Evidence of that increased volume will be clear when Cliffs publishes third-quarter shipping volumes, Goncalves said.
As for POSCO, discussions “remain friendly and ongoing. … But we don’t have a deadline on our side,” he said. “There are strategic benefits that could be realized. But valuation and structure are important. And we’re not desperate to do anything.”
POSCO and Cliffs in October 2025 inked a memorandum of understanding regarding what Cliffs said at the time would become a “transformative” partnership. But the South Korean steelmaker said in December no deal had been finalized. And it noted in May that the two sides were at odds over a number of issues, including valuation.
While M&A might have stalled, Cliffs continues to move ahead with $400 million in “major property sales.” The bulk of those proceeds will be realized in the second half of the year, Goncalves said.
Cliffs’ insistence on higher valuations comes as it significantly narrowed its losses in Q2’26. The company also expects a stronger half thanks to higher steel prices, increased sales volumes, and improved contract terms with automotive customers.
