Cleveland-Cliffs Sees Much Stronger Second Half, More Growth Into ’27
Cleveland-Cliffs (CLF) reported a Q2 net loss of $134M on revenue over $5.2B, partly due to maintenance. On July 23, management forecast higher production and pricing, targeting adjusted EBITDA of $575M in Q3 and $3.3B for 2027 as contracts reset and Stelco improves. CLF shares rose over 15% to $10.96, trading near $11.75 on July 27.
How this was made
The 30-second read
Why it matters
Management expects higher production volumes and improved pricing/cost dynamics to lift adjusted EBITDA in 2026’s second half, with further growth into 2027 from contract resets and Stelco performance improvement.
Market read
Fresh management targets (Q3 $575M adjusted EBITDA, 2027 $3.3B) create a near-term earnings narrative and can drive positioning around the next quarterly print.
What to watch
Asset-sale progress is partial (about $100M received vs ~$425M total), and the POSCO tie-up remains stalled, which could limit optionality if conditions change.
Background
After cost cutting and operational focus, CLF management says demand from auto makers is improving and tariff effects are flowing through.
Ticker impact
Cleveland-Cliffs guides Q3 adjusted EBITDA to $575M and targets 2027 adjusted EBITDA of $3.3B on higher volumes, stronger pricing, and cost resets.
Bullish bias for CLF as the market digests the step-up in EBITDA targets, though execution and demand sensitivity remain key risks.
It provides specific management targets (Q3 $575M, 2027 $3.3B) and ties them to concrete operating drivers (300k net ton production increase, $55 higher price per net ton, slightly lower costs, fixed-price contract resets, Stelco improvement).
Market effects
Supports a constructive read-through for US auto-linked steel demand and pricing, reinforcing the tariff-protection margin thesis for integrated producers.
Reinforces the US as the key market for steel pricing and volume, consistent with tariff-driven demand protection.
POSCO tie-up discussions highlight ongoing global supply and valuation negotiations, but the article’s main impact is US-focused profitability guidance.
Counterpoint
The guidance depends on sustained demand and pricing strength; any auto production slowdown or cost/volume variance could compress the EBITDA ramp quickly.
Key entities
- companyCleveland-Cliffs Inc.
US steel producer providing updated production and adjusted EBITDA targets for Q3 2026 and 2027.
- executiveLourenco Goncalves
Chairman, President and CEO outlining the profitability outlook and operating drivers.
- executiveCelso Goncalves
President and CFO discussing asset sale progress and the status of talks with POSCO.
- companyPOSCO
South Korean steelmaker referenced as a potential tie-up partner, with talks ongoing but limited progress.
- companyGeneral Motors
GM CEO quote used to support the claim that auto demand is not weakening.
