Cleveland-Cliffs, the steel manufacturer, released its third-quarter earnings report on October 20, revealing a revenue of $4.7 billion, a 3.5% year-on-year increase, although $200 million short of market expectations. The company's Non-GAAP EPS stood at -$0.45, aligning with market forecasts. Adjusted EBITDA was reported at $143 million, exceeding the Wall Street expectation of $128 million.
Additionally, Cleveland-Cliffs updated its full-year 2025 guidance, lowering capital expenditure from a previously estimated $600 million to around $525 million, and reducing selling, general, and administrative expenses from $575 million to approximately $550 million. The unit cost of steel is expected to remain consistent with previous guidance, showing a decrease of about $50 per net ton compared to 2024, adjusted for increased automotive shipments. The depreciation, depletion, and amortization (DDA) are maintained at around $1.2 billion, while cash expenditures and contributions for pensions and other post-employment benefits (OPEB) are set at approximately $150 million.
In comparison to Q3 2024 data, the average benchmark steel price this quarter was about $800 per ton, up from $700 per ton in the previous year. The robust earnings report led to an 8% increase in Cleveland-Cliffs' stock price in pre-market trading; during the same period, S&P 500 futures rose by 0.53%, and Dow Jones Industrial Average futures climbed by 0.52%. Year-to-date, Cleveland-Cliffs' stock has surged approximately 42%, driven largely by U.S. President Donald Trump’s import tariff policies that raised domestic steel prices.
CEO Lourenco Goncalves noted that “our Q3 performance clearly illustrates that there are signs of recovery in the demand for automotive-grade steel.” He also emphasized that the quarterly results reflect improved product sales structure and pricing, further reinforced by ongoing cost control measures.
Beyond its steel operations, Goncalves disclosed that Cleveland-Cliffs is setting its sights on the rare earth sector. The company announced the exploration of the feasibility of extracting rare earth minerals from iron ore deposits. Current market dynamics are heavily focused on rare earth elements, particularly as China, which dominates rare earth production and processing, may implement export controls, posing risks for U.S. manufacturing. Rare earths are extensively used in various applications, including electric vehicles, wind turbines, and fighter jets.
In 2025, the largest rare earth producer in the Western Hemisphere, MP Materials (MP.US), has seen its stock price rise over 400%, reaching a market capitalization of about $14 billion, while Cleveland-Cliffs' market cap was under $7 billion at the beginning of the week. Goncalves remarked, “The importance of rare earths is once again highlighted, prompting us to refocus on the potential opportunities within our upstream mining assets.” He added that evidence of rare earths has been found at their two sites in Michigan and Minnesota, stating, “If exploration is successful, Cleveland-Cliffs will align with the U.S. ‘Critical Minerals Independence’ national strategy similarly to our breakthroughs in the steel sector. U.S. manufacturing should not depend on China or any other country for critical minerals; Cleveland-Cliffs aims to be part of the solution to this issue.”
This unexpected strategic pivot somewhat overshadowed another announcement: Cleveland-Cliffs has signed a memorandum of understanding (MOU) with a globally undisclosed steel manufacturer seeking to further penetrate the U.S. market. Cleveland-Cliffs anticipates that this deal “has significant value-add potential for shareholders,” with more details expected to be unveiled in Q4 2025 or Q1 2026. Amid a busy quarter of business activities, investors are still processing these developments.