Cleveland-Cliffs Q3 EBITDA Hits $612M as Shipments Rise
Cleveland-Cliffs returned to quarterly profitability in the third quarter of 2026 as steel shipments rose, selling prices improved and unit costs declined. Adjusted EBITDA reached $612 million, more than double the previous quarter, while the company projected further earnings growth in Q4 and more than $4 billion of adjusted EBITDA in 2027.
Key Points
- Steel Shipments: Q3 sales volumes rose about 3% year over year to 4.2 million net tons.
- Revenue: Increased to $5.6 billion from $5.2 billion in Q2 2026.
- Net Income: Reached $165 million, or $0.26 per diluted share, reversing a $134 million Q2 loss.
- Adjusted EBITDA: Jumped to $612 million from $286 million in the previous quarter.
- 2027 Outlook: Cleveland-Cliffs expects adjusted EBITDA to exceed $4 billion based on signed contracts and prevailing price forecasts.
MONTREAL (Scrap Monster): Cleveland-Cliffs reported its strongest quarterly operating performance in three years in the third quarter of 2026, supported by higher steel selling prices, increased shipment volumes and lower unit costs.
Steel product sales volumes reached approximately 4.2 million net tons during the quarter ended September 30, up about 3% year over year from 4.03 million net tons.
For the first nine months of 2026, steel product shipments totaled 12.283 million net tons, down approximately 1.4% from 12.459 million net tons in the corresponding 2025 period.
Revenue Rises to $5.6 Billion
Third-quarter consolidated revenue increased to $5.6 billion, compared with $5.2 billion in the second quarter.
Cleveland-Cliffs recorded GAAP net income of $165 million, equivalent to $0.26 per diluted share. That marked a sharp improvement from the second quarter, when the company reported a GAAP net loss of $134 million.
Adjusted net income was $0.28 per diluted share.
Adjusted EBITDA More Than Doubles From Q2
Adjusted EBITDA climbed to $612 million from $286 million in the second quarter, a $326 million sequential improvement.
The result also exceeded Cleveland-Cliffs' previous guidance of approximately $575 million.
Chairman and CEO Lourenco Goncalves said higher average selling prices, increased sales volumes and lower unit costs all contributed to the stronger performance.
The quarter was the company's strongest in three years, according to Cleveland-Cliffs.
Steel Selling Prices and Volumes Improve
The company's average net selling price increased to $1,177 per net ton, compared with $1,124 per net ton in the second quarter and $1,032 per net ton in the year-earlier period.
Third-quarter steel product sales volumes consisted of:
- 46% hot-rolled steel
- 31% coated steel
- 15% cold-rolled steel
- 4% plate
- 4% stainless and electrical steel
Steelmaking revenue totaled approximately $5.4 billion.
Liquidity Stands at $3.2 Billion
Cleveland-Cliffs ended September with approximately $3.2 billion in liquidity.
The company said stronger free cash flow and proceeds from property sales are expected to support a significant reduction in debt during the fourth quarter.
Cleveland-Cliffs remains focused on reaching a leverage ratio of less than 2.5 times net debt to EBITDA by mid-2027.
Q4 EBITDA Expected to Reach About $715 Million
Cleveland-Cliffs expects fourth-quarter adjusted EBITDA of approximately $715 million, up from $612 million in Q3.
The company expects stronger pricing to more than offset seasonal factors, increased maintenance outages, higher input costs and incentive-compensation expenses.
Based on customer contracts already signed and prevailing steel-price forecasts, Cleveland-Cliffs said it expects 2027 adjusted EBITDA to exceed $4 billion.
Stelco Posts Strongest Quarter Since Acquisition
Cleveland-Cliffs also reported improved results from Stelco, saying the Canadian business delivered its strongest quarter since the acquisition was completed two years ago.
The company attributed the improvement to a recovery in Canada's hot-rolled steel market, which allowed Stelco to become a positive contributor to adjusted EBITDA during the quarter.
However, Cleveland-Cliffs remains concerned about oversupply in the Canadian galvanized-steel market.
The company has decided to indefinitely idle Stelco's galvanizing lines and concentrate production on hot-rolled products where it sees stronger demand.
Cleveland-Cliffs said overall Stelco production tonnage is expected to be maintained and approximately 2,000 Canadian jobs preserved. The company said affected employees would be brought back when market conditions improve.
Butler Works GOES Expansion Moves Ahead
Cleveland-Cliffs is also proceeding with a $200 million expansion of grain-oriented electrical steel production at its Butler Works facility in Pennsylvania.
The project is supported by up to $75 million from the U.S. Department of Energy and is designed to expand GOES production capacity by as much as 25%.
The upgrades include new electrified induction reheat furnaces and related infrastructure intended to improve steel quality, increase operating efficiency, reduce production losses and lower emissions.
Cleveland-Cliffs currently expects the expansion to be completed in early 2028. The DOE's existing project page continues to list an expected completion date of 2029.
Butler Works is the sole U.S. producer of grain-oriented electrical steel, a critical material used in electrical transformers and power-grid infrastructure.
Courtesy: GMK Center