Cleveland-Cliffs Jumps 10% on Strongest Quarter in Three Years; Nucor and Steel Dynamics Edge Higher
Cleveland-Cliffs just posted its best quarter in three years, but the revenue miss and a shuttered Canadian operation tell a more complicated story about whether this steel giant's turnaround can actually hold.
A major U.S. steelmaker just delivered its best quarter in three years. Cleveland-Cliffs (NYSE:CLF | CLF Price Prediction) stock is up 10% to $13.29 this morning after the company’s Q3 2026 report showed earnings before interest, taxes, depreciation and amortization (EBITDA) beating its own guidance.
Meanwhile, Nucor (NYSE:NUE) shares are up 2%, rising far less than Cleveland-Cliffs stock. Nucor runs scrap-fed electric arc furnace mills, while Cleveland-Cliffs is an integrated producer that mines its own iron ore and sells heavily to automakers.
The VanEck Steel ETF (NYSEARCA:SLX) rose 0.7% in the prior session through its close. Elsewhere, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.5%. That modest background marks the rally as one specific to Cleveland-Cliffs stock.
EBITDA Beat Outruns a Revenue Miss
Cleveland-Cliffs posted adjusted EBITDA of $612 million in Q3, clearing the $575 million guidance it gave three months earlier. Chairman and CEO Lourenco Goncalves stated, “Third quarter was our strongest quarter in three years.” A year earlier, Cleveland-Cliffs generated only $143 million of adjusted EBITDA.
The company’s profitability reversed as well, with Cleveland-Cliffs earning net income of $165 million after a $134 million loss in Q2 2026. On a per-share basis, Cleveland-Cliffs earned an adjusted $0.28, exceeding the $0.24 consensus.
Top-line results were the soft spot, as Cleveland-Cliffs revenue of $5.61 billion missed the $5.72 billion analysts expected. Yet, the company’s sales rose 18.6% year over year. That split puts the spotlight on pricing and costs as the engine of the quarter.
Behind the beat, Cleveland-Cliffs said average selling price, sales volumes and unit costs all improved from the second quarter. Its average net selling price rose to $1,177 per ton from $1,124, while shipments reached 4.2 million net tons versus 4.025 million.
Trade Tailwinds and a Stelco Reset
Goncalves tied the Cleveland-Cliffs rebound to a policy background that favors domestic mills. “The trade environment continues to support a healthy American steel industry. Imports remain well below historical levels, lead times are extended, and our customers increasingly recognize the value of a reliable domestic supply chain,” he declared.
Stelco, the Canadian steelmaker Cleveland-Cliffs bought two years ago, turned EBITDA positive in Q3 as the local hot-rolled market improved. Galvanized steel remains oversupplied in Canada. As a result, management made “the difficult but necessary decision to indefinitely idle our galvanizing lines at Stelco.” Production there is now concentrated on hot-rolled products.
Steel Dynamics (NASDAQ:STLD), a fellow domestic steelmaker, sells into the same U.S. market Goncalves described; STLD shares are up 1% to $243.20. For Cleveland-Cliffs, its heavy automotive mix makes contract pricing the key driver as customers place more value on a reliable domestic supply chain.
Guidance Points to a Bigger Fourth Quarter
Cleveland-Cliffs expects Q4 2026 adjusted EBITDA of approximately $715 million, with higher pricing partly offset by seasonality, maintenance outages, input costs and incentive compensation accruals. That guidance would mark another step up from the Q3 result. Management also expects a major debt reduction in the quarter, funded by stronger free cash flow and property sale proceeds.
Cleveland-Cliffs has already signed new contracts. Looking further out, Goncalves stated that, based on current index price forecasts, “we would expect our 2027 adjusted EBITDA to exceed $4 billion.” The Q3 cash generation at Cleveland-Cliffs gave the plan a starting point, with the company producing $224 million in operating cash flow and $72 million in free cash flow. Debt reduction remains the company’s top use of that cash until the leverage target is reached.
A Three-Year Best Quarter Raises the Stakes
Cleveland-Cliffs carries real risks, including heavy debt, reliance on automotive demand and volatile steel and iron ore prices, but upside rests on contract resets and the 2027 outlook, while the idled Stelco galvanizing lines show the Canadian business remains a work in progress. Shareholders can watch for whether the promised fourth-quarter debt reduction lands.
Cleveland-Cliffs now faces the question of whether its leverage falls under 2.5x net debt to EBITDA by mid-2027, the target management reaffirmed. Investors should consider keeping their position sizes modest until the Cleveland-Cliffs margin recovery resolves.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
