News Summary
Cleveland-Cliffs has landed a $400 million contract to supply steel for electrical transformers and generators over five years. While the stock reached yearly highs following the contract announcement, the company’s Q3 revenue of $4.7 billion fell short of expectations, leading to a net loss. Factors such as increased demand and strategic agreements with automotive manufacturers are influencing the company’s operations, alongside future expansion into rare earth minerals.
Cleveland, Ohio
Cleveland-Cliffs has secured a significant $400 million contract with the Defense Logistics Agency to supply steel for electrical transformers and generators over the next five years. This contract stipulates the delivery of 53,000 tons of grain-oriented electrical steels, which will be stockpiled to bolster national security initiatives.
The announcement of the contract has resulted in Cleveland-Cliffs’ stock reaching yearly highs on October 20, 2025. Despite this positive development, the company reported consolidated revenue of $4.7 billion for the third quarter of 2025, falling short of investor forecasts which estimated $4.9 billion.
In terms of net performance, Cleveland-Cliffs posted a net loss of $234 million for Q3 2025, translating to a loss of 45 cents per share. This marked the fifth consecutive quarterly loss for the company, despite an increase in shipments, with 4 million tons of steel shipped at an average selling price of $1,032 per net ton, which reflects an increase of $17 per net ton from the previous quarter.
Factors Influencing Steel Prices
Cleveland-Cliffs’ CEO noted that the increase in steel prices can be attributed to a rise in demand for domestically produced steel, a trend that follows the implementation of steel tariffs by former President Trump. In March 2025, Trump imposed a 25 percent tariff on imported steel and aluminum, increasing it to 50 percent in June.
Moreover, the company has secured multi-year supply agreements with all major automotive manufacturers. This strategic move is expected to lead to higher sales volumes and improved pricing through 2027-2028. Notably, Cleveland-Cliffs is now recognized as the largest supplier of steel for North American automotive manufacturers, operating nine automotive-grade galvanized steel manufacturing plants.
Future Prospects in Rare Earth Minerals
In a significant expansion move, Cleveland-Cliffs signed a Memorandum of Understanding with a major global steelmaker aimed at leveraging its U.S. steel plants, with a formal announcement expected soon. The company’s recognition as the only producer of domestically produced electrical steels is critical for maintaining and expanding the U.S. electrical grid.
The company is also exploring the rare earth mineral sector, as geological surveys have indicated potential mineralization at two mining locations in Michigan and Minnesota. This initiative aligns with U.S. strategies to achieve critical material independence, marking both an opportunity and a national responsibility.
Performance Insights
The third quarter of 2025 marked Cleveland-Cliffs’ best shipment quarter for automotive steel since early 2024, fostering optimism for future trends in 2026 and beyond. The company anticipates further operational improvements and cost reductions, having achieved a 52% increase in sequential adjusted EBITDA during Q3.
Additionally, the impending expiration of a contract for imported steel slabs is expected to further enhance Cleveland-Cliffs’ operational integration. The company also plans to utilize proceeds from the estimated $425 million in property asset sales entirely for debt reduction.
Competitive Landscape
Cleveland-Cliffs’ strategic decisions are poised to reshape competitive dynamics in both the steel and rare earth industries, with potential impacts on key rivals such as U.S. Steel and Nucor. The company’s agenda strongly aligns with national security objectives, aiming to reduce dependency on foreign sources for essential materials like rare earths.
As Cleveland-Cliffs navigates its current challenges and opportunities, its multifaceted approach emphasizes growth, national security, and commitment to domestic production, marking a pivotal moment for the Ohio-based steelmaker.
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Additional Resources
- NTD: Cleveland-Cliffs Stock Jumps
- Wikipedia: Cleveland-Cliffs
- Investor’s Business Daily: Cleveland-Cliffs Foreign Steelmaker
- Encyclopedia Britannica: Steel
- Financial Content: Cleveland-Cliffs Soars
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