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Cleveland-Cliffs said third-quarter EBITDA doubled, helped by tariffs that have cut steel imports by 35% to 40% from levels before Section 232. Management called the trade environment "rational" and said mills ran at full utilisation, pushing unit costs $17 per ton below guidance. The company expects adjusted EBITDA of more than $4 billion in 2027, assuming current market conditions. Capital expenditure should rise from $700 million in 2026 to just over $1 billion in 2027. Free cash flow will go first to debt reduction, with leverage targeted below the 2.0x-2.5x range by mid-2027. Management ruled out issuing stock. Over 55% of clients have signed 2027 contracts, with "take-or-pay" clauses becoming the norm. The Burns Harbor furnace reline is delayed to April 2028 to meet demand.

Cleveland-Cliffs beat profit estimates as adjusted EBITDA reached $612 million. The steelmaker forecast fourth-quarter adjusted EBITDA near $715 million and is idling galvanizing lines at Stelco Cleveland-Cliffs reported third-quarter net income of $165 million, or 26 cents per diluted share, on Monday, a swing from a net loss of $134 million in the second quarter. Adjusted earnings were 28 cents per share, compared with an adjusted loss of 20 cents in the second quarter. Adjusted EBITDA was $612 million, up from $286 million in the second quarter and above the $575 million guidance the company gave three months earlier. Revenue climbed to $5.61 billion, compared with $5.23 billion in the prior quarter. Steel shipments totaled 4.2 million net tons, with each ton fetching $1,177 on average, compared with $1,124 in the second quarter. "Third quarter was our strongest quarter in three years," CEO Lourenco Goncalves said in a statement. "Average selling price, sales volumes, and unit costs all moved in the right direction relative to Q2 performance." Adjusted earnings per share topped the 21 cents analysts expected, according to The Wall Street Journal. Analysts surveyed by Zacks Investment Research expected 24 cents, according to The Associated Press. Analyst revenue forecasts differed. They stood at $5.7 billion according to The Wall Street Journal and $5.58 billion according to The Associated Press. Cleveland-Cliffs stock climbed 14%, to $13.76, ahead of the opening bell Monday. The company expects fourth-quarter adjusted EBITDA near $715 million. It cited higher pricing, offset in part by seasonality, increased maintenance outages, input costs and incentive compensation accruals. Based on 2027 contract changes and prevailing price forecasts, it expects 2027 adjusted EBITDA to exceed $4 billion. Goncalves said the company expects a major debt reduction in the fourth quarter. "The trade environment continues to support a healthy American steel industry," Goncalves said. "Imports remain well below historical levels, lead times are extended, and our customers increasingly recognize the value of a reliable domestic supply chain." Goncalves said the quarter was the strongest for Stelco, its Canadian subsidiary, since Cleveland-Cliffs acquired it two years ago. He said an improved Canadian hot-rolled market made Stelco a positive contributor to EBITDA in the third quarter. The company is idling its galvanizing lines at Stelco until conditions improve, Goncalves said, citing an oversupplied Canadian galvanized steel market and a lack of government action. Affected employees will return to work when the situation improves. Total production tonnage at Stelco will be maintained, and "approximately 2,000 Canadian jobs are preserved," he said. Cleveland-Cliffs announced last month that it would idle cold-rolled and coated operations at Stelco's Hamilton, Ontario, plant, affecting up to 500 workers. Canadian Prime Minister Mark Carney threatened legal action over employment commitments tied to the C$3.4 billion ($2.4 billion) acquisition of Stelco in 2024. Carney's government is considering legal steps that range from fines to potentially compelling a sale of assets, according to The Wall Street Journal. Daily Brief The essential business news, delivered fresh every morning. Join 500,000+ readers who start their day with Quartz.

What is Stelco and why has it become a flashpoint in the Canada-U.S. trade war? Hamilton-based Stelco Holdings Inc. sent shockwaves through an already embattled Canadian steel industry when U.S. parent company Cleveland-Cliffs Inc. announced on Sept. 28 it would indefinitely idle its Hamilton plant and lay off hundreds of workers. In response, Industry Minister Mélanie Joly has threatened legal action if Stelco does not preserve its Ontario jobs, citing commitments agreed upon under the Investment Canada Act when Cleveland-Cliffs first assumed ownership of the company. Joly's moves are the latest development in the growing saga of Stelco, a company with a storied history that has become a flashpoint in the Canada-United States trade war. What is Stelco and how did it come to be? Stelco, the Canadian-based steelmaker that helped build Hamilton into "Steel City," has been around for more than a century. It was originally incorporated in 1910 as the Steel Company of Canada, an amalgamation of five already-existing iron and steel companies: Hamilton Steel and Iron Co.; Montreal Rolling Mills Co.; Canada Screw Co.; Canada Bolt and Nut Co. and Dominion Wire Manufacturing Company. Hamilton was the ideal base for operations at the time since it was already home to limestone deposits (limestone being a key ingredient in steelmaking) while coal and iron ore could easily be transported by boat to the city's port, said Marvin Ryder, associate professor at McMaster University's DeGroote School of Business. During the 1920s, Stelco had grown to become the largest steelmaker in Canada. The company hit its peak in the 1970s and 1980s, when Stelco employed about 25,000 workers. Stelco's management later began the shift toward automating more of its steel production and today, though the company still produces plenty of steel, it is no longer one of Hamilton's biggest employers, Ryder said. "In a sense, Stelco in Hamilton was hollowed out more than a decade ago," said Ryder, adding that Stelco stopped producing primary steel at its Hamilton Works facility in 2013. The facility receives its steel from the Lake Erie Works mill in Nanticoke, about 60 kilometres southwest of Hamilton, coats it in zinc to prevent rusting and rolls it into thin sheets for distribution to other industries, such as the automotive sector, said Ryder. The Hamilton facility also operates coke ovens, which bake coal into a carbon-rich material used to make steel. This coke is then transported to the Nanticoke mill for steel production. Ryder said the Hamilton workers who operate the coke ovens are not being affected by the layoffs.