Cleveland-Cliffs Inc (CLF) Q4 2025 Earnings Call Highlights: Navigating Market Challenges and ...
Cleveland-Cliffs Inc (CLF) outlines its strategic initiatives and market expectations for 2026 amidst fluctuating steel prices and evolving market dynamics.
This article first appeared on GuruFocus. Total Shipments Q4 2025: 3.8 million tons. Expected Shipments Q1 2026: Approximately 4 million tons. Full Year 2026 Shipment Expectation: 16.5 million to 17 million tons. Q4 2025 Price Realization: $993 per net ton, a decrease of $40 per net ton. Expected Price Increase Q1 2026: Approximately $60 per ton from Q4 2025. Unit Cost Reduction 2025: $40 per ton. Expected Unit Cost Reduction 2026: $10 per ton. Capital Expenditures 2025: $561 million. Projected Capital Expenditures 2026: Approximately $700 million. Total Liquidity End of 2025: $3.3 billion.
Asset Sale Proceeds Expectation: $425 million. Warning! GuruFocus has detected 9 Warning Signs with CLF. Is CLF fairly valued? Test your thesis with our free DCF calculator. Release Date: February 09, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Cleveland-Cliffs Inc (NYSE:CLF) has secured more business from automotive clients, which is expected to boost performance throughout 2026. The Canadian Government's move to restrict imported steel has created positive momentum for CLF's Canadian subsidiary, Stelco.
CLF's robust order book and the implementation of Section 232 tariffs have improved the business environment, leading to a two-year high in spot steel prices. The company has successfully replaced aluminum with steel in automotive components, expanding the market for its steel products. CLF achieved a remarkable safety record in 2025, with a 43% improvement in total recordable incident rate compared to 2021. Negative Points In 2025, CLF faced challenges due to steel imports affecting domestic market demand, leading to asset shutdowns. The termination of the index-based slab supply contract with ArcelorMittal was costly in its final year, impacting performance.
Automotive production in the United States was down for the third consecutive year in 2025, affecting CLF's core market. The Canadian steel market dynamics negatively impacted CLF's performance, with Canada becoming a dumping ground for steel imports. CLF's leverage remains elevated, and the company is focused on generating EBITDA and cash flow to address this issue. Q & A Highlights Q: Can you update us on the expected benefits from the cancellation of the slab contract and the CapEx outlook for 2027? A: Lourenco Goncalves, CEO, explained that the termination of the slab contract with ArcelorMittal is expected to result in an EBITDA gain of approximately $500 million due to replacing slabs with higher-margin products.
Celso Goncalves, CFO, added that CapEx for 2027 is projected to be around $900 million, primarily due to the Burns Harbor furnace reline, before returning to $700 million in 2028. Story Continues Q: How much open capacity does Cleveland-Cliffs have, and what is the potential EBITDA impact? A: Lourenco Goncalves, CEO, stated that Cleveland-Cliffs has significant downstream capacity across various locations, such as the galvanizing line in Columbus, Ohio, which is underutilized. The company is poised to increase capacity utilization as automotive production in the U.S. rises, potentially leading to substantial EBITDA improvements.
Q: What are the expectations for ASP, costs, and volumes in Q1 2026? A: Celso Goncalves, CFO, indicated that Q1 shipments should return to the 4 million-ton mark, with ASP expected to rise by $60 per ton. Costs are anticipated to increase by $20 per ton in Q1 before normalizing in Q2. Overall, the full-year cost is expected to decline by $10 per ton compared to 2025. Q: Has Cleveland-Cliffs completed its due diligence on POSCO, and what is the strategic importance of this partnership? A: Lourenco Goncalves, CEO, confirmed that Cleveland-Cliffs has completed its due diligence on POSCO. The partnership is a strategic priority, as it would allow POSCO to meet U.S.
trade requirements and provide Cleveland-Cliffs with a significant opportunity to enhance its market position. Q: Can you quantify the impact of Stelco on earnings and the potential upside from the Canadian market turnaround? A: Celso Goncalves, CFO, acknowledged that Stelco's performance was disappointing in 2025 but is expected to improve significantly in 2026. The Canadian market's turnaround, aided by recent government actions, should lead to Stelco becoming a substantial contributor to Cleveland-Cliffs' overall results. For the complete transcript of the earnings call, please refe
r to the full earnings call transcript.