Cleveland-Cliffs Touts U.S. Outlook, Defends Stelco Actions

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Written by Will Ploch, Assistant Editor-in-Chief for IIR News Intelligence (Sugar Land, Texas)

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Summary

Amid strong quarterly results companywide, as well as plans to expand production in the U.S., Cleveland-Cliffs is facing harsh criticism over plans to close two plants in Canada.

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Over-the-Border Blues

Cleveland-Cliffs Incorporated is upbeat about its outlook for the coming year, after strengthening steel prices, new customer contracts and other factors boosted its recent results. But the company is taking heat for plans to close a pair of financially troubled steel plants in Canada. Industrial Info Resources is tracking more than US$3 billion worth of active and proposed projects from Cleveland-Cliffs worldwide, including about US$555 million worth nearing or under construction.

After acquiring Canadian steelmaker Stelco in late 2024, Cleveland-Cliffs was faced with a series of economic hurdles related to U.S. President Donald Trump's increasingly hostile attitude toward Canada's trade with the U.S., including his administration's tariffs on galvanized and cold-rolled steel, and heavy competition from cheaper imports.

The effects were devastating for Hilton Steel Works in Hamilton, Ontario, and Lake Erie Works in Nanticoke, Ontario, which are Stelco's two operational plants. On September 28, Cleveland-Cliffs announced it would indefinitely halt operations at the two facilities and lay off up to 500 steelworkers.

The move provoked a furious response from Ottawa: Federal Industry Minister Mélanie Joly noted that Cleveland-Cliffs had agreed to a five-year package of commitments as part of the 2024 acquisition, including an agreement to maintain the number of union jobs and most of the non-union positions at the two plants. She also noted C. Lourenco Goncalves, the chief executive officer of Cleveland-Cliffs, has been largely supportive of Trump's steel tariffs.

Joly wasn't shy about threatening legal action: "We will use the full force of the law and every tool at our disposal to keep this strategic capacity operational," she posted Friday on X.

In a quarterly earnings-related conference call on Monday, Goncalves acknowledged the federal Canadian government recently offered financial assistance to keep the Stelco plants operational, but "government money cannot buy a market for galvanized steel." He added: "The domestic market for galvanized steel in Canada is not big enough to accommodate two Canadian producers of galvanized steel--Stelco and ArcelorMittal Dofasco--and also an avalanche of imports."

According to Industrial Info Resources data, about US$60 million worth of improvement projects were underway at these two plants at the time the layoffs were announced, with another US$17.5 million proposed. Stelco was in the process of installing new equipment and upgrading existing equipment at both facilities, with additional work planned for existing oxygen furnaces and coke ovens.

Industrial Info Resources offers more information on the Stelco facilities in its Global Market Intelligence (GMI) Metals & Minerals Plant and Project databases, where readers can find details--including construction schedules, investment values and necessary equipment--in profiles of the Hamilton and Nanticoke plants, and a list of related project reports.

Events took a slightly unexpected turn in Monday's earnings call, when Cleveland-Cliffs announced Stelco had become profitable again, with Goncalves lauding Ottawa's recently implemented tariff-rate quotas (TRQs). However, executives indicated this likely would not convince them to keep the plants operational.

"Notwithstanding all the attention that Stelco's limited layoffs have drawn, it is important to emphasize that Stelco is finally profitable," Goncalves said in Monday's earnings call. "The enhanced TRQs implemented by the Canadian government in December 2025--and updated in June 2026--worked well for hot-rolled steel. But Stelco would be even more profitable if dumped galvanized steel imported into Canada would no longer be tolerated."

By the Numbers

• More than US$3 billion: Total value of active and proposed projects from Cleveland-Cliffs worldwide
• Up to 500: Number of steelworkers set to be laid off as part of the company's proposed halt to operations at its Stelco facilities
• More than $1 billion: The company's capex outlook for full-year 2027

More U.S. Capacity on the Way

Cleveland-Cliffs expects its capital expenditures (capex) for full-year 2026 will total about US$700 million and grow to more than $1 billion for full-year 2027. The company attributed its capex outlook to upgrades and expansions at several U.S.-based facilities, such as its Butler Steel Works in Lyndora, Pennsylvania, where it plans to increase steel production 25% in response to demand from the domestic power grid.

To accommodate the higher output at the 1 million-ton-per-year Butler facility, Cleveland-Cliffs is in the process of adding four electrified-induction slab-reheat furnaces, which is expected to add 25,000 tons of output, and it is preparing to begin construction on a hot mill expansion next year. Readers can learn more in a plant profile and detailed reports on the furnace and hot mill expansions.

Cleveland-Cliffs reported revenues of US$5.6 billion for the third quarter, an 18.5% increase from the same period last year. The company reported net income of US$152 million, compared with a US$251 million net loss in third-quarter 2025.

The Industrial Info Resources GMI Project and Plant databases offer a full list of detailed reports for projects mentioned in this article, and a full list of related plant profiles.

Industrial Info Resources also offers a full list of reports for active and proposed projects from Cleveland-Cliffs worldwide.

Key Takeaways

• Cleveland-Cliffs plans to indefinitely halt operations at its two Stelco steelmaking plants in Canada.
• The company attributes its positive capex outlook to upgrades and expansions at several U.S.-based facilities.
• Cleveland-Cliffs aims to increase steel production 25% at its Butler plant in response to demand from the domestic power grid.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).