Cleveland-Cliffs Declines 6% as Profit Taking Follows Strongest Quarter in Three Years; Critical Metals Slips 2%, Nucor Holds Steady

Shares of Cleveland-Cliffs (NYSE:CLF | CLF Price Prediction) are giving back part of the rally that followed the steelmaker’s strongest quarter in three years. Cleveland-Cliffs stock has dropped 6% to $13.31 as morning trading unfolds, falling far harder than the rest of the steel group.

Meanwhile, Critical Metals (NASDAQ:CRML) stock is down 2% to $6.37, a slide that trails the drop in Cleveland-Cliffs shares. At the same time, Nucor (NYSE:NUE) stock practically unchanged at $260.58.

Strongest Quarter in Three Years Sparks Profit Taking

Cleveland-Cliffs reported Q3 2026 adjusted earnings per share (EPS) of $0.28 on Monday, exceeding the $0.24 consensus estimate. The company’s revenue reached $5.61 billion, slightly missing expectations of $5.72 billion.

Higher prices did the heavy lifting for Cleveland-Cliffs. Its average net selling price rose to $1,177 per ton from $1,124 in Q2 2026, pushing adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) past the company’s own guidance. CEO Lourenco Goncalves summed up the period. He stated, “Third quarter was our strongest quarter in three years, with adjusted EBITDA of $612 million, a number above the $575 million guidance we provided three months ago.”

Looking ahead, Cleveland-Cliffs expects Q4 2026 adjusted EBITDA of $715 million and projects the 2027 figure above $4 billion, citing newly signed customer contracts. Executives expect Q4 to top Q3 even with typical seasonal slowdowns and planned maintenance outages, and that outlook triggered a sharp rally in Cleveland-Cliffs stock on Monday, while the decline now under way reads as profit taking after that run.

One soft spot sits in Canada, where Cleveland-Cliffs plans to indefinitely idle the galvanizing lines at its Stelco unit amid an oversupplied market. Management stated that an improving Canadian hot-rolled market turned Stelco into a positive EBITDA contributor in Q3, which keeps the setback contained to one product line.

Contract Resets Anchor the 2027 Outlook

On the earnings call, Cleveland-Cliffs management described its 2027 contract renewals as the most important positive development since the previous update, with those deals covering most light flat-rolled steel use outside automotive. More than half of the contracts were signed as of the call, and 55% to 60% of clients had already agreed to take-or-pay terms. Customers are focused more on securing volume than on price, management stated.

Trade policy supports that pitch for Cleveland-Cliffs, with executives maintaining that imports remain 35% to 40% below levels seen before the 50% Section 232 steel tariffs. Cleveland-Cliffs also ruled out a share sale, with management declaring, “We are not going to issue stock. We don’t need to.”

Steel Fund Barely Budges as Cleveland-Cliffs Slides

The VanEck Steel ETF (NYSEARCA:SLX) is basically unchanged at $103.21, so sector-level concerns don’t explain the decline in Cleveland-Cliffs shares today. Meanwhile, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.66% to $771.54, which shows the broad market heading higher. The SLX ETF also holds big global miners and foreign steelmakers, so its flat performance reflects a far wider basket.

Cleveland-Cliffs runs an integrated steel operation that also includes Stelco, while Nucor focuses on domestic production. Nucor stock’s modest dip and the small decline in SLX point to selling concentrated in Cleveland-Cliffs shares, a pattern consistent with profit taking after a big run.

Q4 Forecast Is the Next Hurdle for Cleveland-Cliffs

Cleveland-Cliffs now faces the question of whether Q4 adjusted EBITDA lands where the company forecast. Management at Cleveland-Cliffs expects its newly signed customer contracts to lift profit sharply in 2027, giving the bull case a clear benchmark.

Heavy borrowing supports the bear case for Cleveland-Cliffs, which is targeting leverage under 2.5x net debt to EBITDA by mid-2027. Traders may prefer to keep their exposure smaller until the post-earnings swing in Cleveland-Cliffs stock resolves.

Contact [email protected] for any questions or corrections.