Cleveland-Cliffs' EBITDA Rebound Highlights Signs of U.S. Steel Demand Recovery
Despite a net loss, Cleveland-Cliffs' Q3 2025 results paint a nuanced picture: while revenues softened compared to last year, key indicators point to improving operating margins and resilient U.S. steel demand, especially from automotive manufacturers. Management attributes much of this to favorable trade policies and recently secured, multi-year auto industry contracts that deepen Cliffs’ leadership in value-added steel.
Automotive Contracts and Trade Environment Fuel Sales Mix Improvement
In the third quarter, Cliffs shipped 4.0 million net tons of steel, with 30% of steelmaking revenue now coming from the automotive sector. CEO Lourenco Goncalves emphasized that, “Our third quarter results marked a clear sign of demand recovery for automotive-grade steel made in the USA, and that is a direct consequence of the new trade environment implemented and enforced by the Trump Administration.” This translated to a richer sales mix, supporting average selling prices of $1,032 per ton—relatively stable compared to previous periods despite softening market volumes.
| Q3 2025 Steel Segment Data | Q3 2025 | Q2 2025 | Q3 2024 |
|---|---|---|---|
| Shipments (net tons, millions) | 4.03 | 4.29 | 3.84 |
| Avg. Selling Price ($/ton) | 1,032 | 1,015 | 1,045 |
| Steelmaking Revenues ($B) | 4.56 | 4.77 | 4.42 |
| Cash Margin ($M) | 205 | 138 | 110 |
| Adjusted EBITDA ($M) | 143 | 94 | 122 |
Strategic Initiatives Aim to Drive 2026 Acceleration and Diversification
The company highlighted two major forward-looking efforts. First, Cliffs announced a Memorandum of Understanding with a major global steel producer, seeking to leverage its strong U.S. footprint for trade-compliant operations—a move seen as highly accretive in the longer term. Second, Cleveland-Cliffs is re-focusing on extracting rare earth minerals at key upstream sites, aligning with U.S. strategies for critical mineral independence. CEO Goncalves stated, “American manufacturing shouldn't rely on China or any foreign nation for essential minerals, and Cliffs intends to be part of the solution.”
Liquidity and Cost Controls Underpin Resilience Amid Losses
Cliffs finished Q3 with $3.1 billion in liquidity and reported reductions in capital expenditures ($525 million now forecast for 2025) and SG&A expenses. Even as the company posted a GAAP net loss of $234 million, this was an improvement over Q2 2025’s loss of $473 million. Adjusted net loss improved to $223 million (or $0.45 per share), and Adjusted EBITDA grew to $143 million from $94 million in Q2, marking clear progress in cost discipline.
| Key Q3 Financials (Millions USD) | Q3 2025 | Q2 2025 | Q3 2024 |
|---|---|---|---|
| Total Revenues | 4,734 | 4,934 | 4,569 |
| GAAP Net Loss | (234) | (473) | (232) |
| Adjusted Net Loss | (223) | (250) | (158) |
| Liquidity | 3,100 | 3,200 | 3,200 |
Operational Strength in Automotive, Plate, and Electrical Steel Segments
The segment breakdown reveals the strength of Cleveland-Cliffs' positioning. Of steelmaking revenues, 30% came from auto, 29% from infrastructure/manufacturing, and another 28% from distributors and converters. This diversified exposure insulates Cliffs from over-reliance on a single market, supporting stable pricing even amid shifting macro conditions. Moreover, product mix remains well-diversified across hot-rolled, coated, cold-rolled, plate, stainless/electrical, and other specialty steels.
What’s Next: Eyes on New Partnerships and U.S. Critical Minerals
Investors should watch for the outcome of the ongoing MoU and developments in Cliffs’ rare earth mineral projects—both could prove transformative, expanding the company’s strategic relevance far beyond traditional steelmaking. With management projecting ongoing cost improvements and improved margins as a legacy slab contract expires, the setup for 2026 appears incrementally favorable, provided demand momentum holds and supply chains remain stable.
Bottom Line: Progress Amidst Uncertainty
Cleveland-Cliffs’ Q3 shows clear improvement in margin management, new growth opportunities with global partners, and a reinvigorated focus on both automotive and critical materials. While profitability remains under pressure, the combination of strategic U.S. positioning, enhanced auto industry ties, and innovation in mineral sourcing should keep this name firmly on the radar for anyone tracking the evolution of American manufacturing and raw materials supply chains.
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