Cleveland-cliffs inc（CLF.US AI Earnings Summary）

Adjusted EBITDA significantly exceeded own expectations, marking the strongest single-quarter performance in three years.

1. Adjusted EBITDA doubled QoQ, approx. 6.4% higher than own guidance: Adjusted EBITDA reached $612M this quarter, up $326M from $286M last quarter, and higher than the ~$575M forecast given in the previous earnings call. CFO Celso Goncalves noted that better-than-expected cost performance was the primary driver of the beat, rather than just price or volume factors.

2. Average Selling Price (ASP) rose $53 QoQ to $1,177 per ton: ASP increased by $53 from $1,124 last quarter, largely in line with the "~$55 increase" guidance. Pricing in both US and Canadian markets rose simultaneously, and the CFO stated that backfilling orders (converting order books to shipments) continues to push realized prices higher.

3. Unit costs fell $17 QoQ, significantly better than the $10 reduction guidance: Unit costs per ton decreased by $17, surpassing the $10 reduction expected last quarter. The CFO explained that full-capacity blast furnace operations were core to cost optimization; current utilization rates are at multi-year highs, fully leveraging the economies of scale of an integrated steel mill.

4. Automotive steel shipments reached their highest level since 2023 Q3: Automotive shipments hit a nearly three-year high, even as overall production by North American OEMs declined QoQ. Presentation slides show that direct automotive customers accounted for 28% of quarterly revenue, as the company solidifies its position as the largest US automotive steel supplier.

5. 2027 non-automotive fixed-price contract renegotiations exceeded expectations; potential EBITDA contribution raised from $500M to $850M: CEO Lourenco Goncalves stated that 2027 contract negotiations are progressing far ahead of expectations, with over 55% of customers already signed and zero rejections of new terms. Slides indicate the estimated EBITDA contribution from fixed-price resets has been raised to $850M from the $500M estimate given last quarter; contract structures have also shifted entirely toward index-linking with "take-or-pay" minimum volume clauses.

6. Burns Harbor C blast furnace reline delayed to April 2028, preserving ~500,000 tons of capacity in 2027: Management decided to postpone the mid-2027 reline to April 2028 to maintain capacity in the current favorable pricing environment. The CFO noted this will add ~500,000 tons of previously unplanned production in 2027, strengthening near-term cash flow generation.

7. $1B Middletown Works modernization project officially launched with $500M US DOE grant: The company completed the replanning of the Middletown Works project with a $1B total investment, $500M of which comes from US Department of Energy grants, with completion expected in 2030 Q1. The plan includes blast furnace reconstruction, AI process control, and a cogeneration facility to convert furnace exhaust into power and steam, maintaining uninterrupted production throughout.

8. Stelco returned to profitability as Canadian HRC prices quickly converged with US levels: The Tariff Rate Quota (TRQ) system implemented by the Canadian government in December 2025 and June 2026 has been highly effective for the hot-rolled steel business. Slides show Canadian HRC spot prices rebounded from $788/ton in April 2026 to $1,226/ton by October 15, significantly narrowing the gap with the US price of $1,259; Stelco as a whole has returned to profit.

9. 2027 coal contracts renewed at flat prices, locking in stability for the largest raw material cost: The CFO stated that 2027 coal and coke contracts have been renewed at the same prices as 2026. As coal and coke represent the largest portion of the company's cost structure, this flat renewal provides critical cost visibility for the 2027 earnings outlook.