Cleveland-Cliffs Inc. reported a return to profitability in the third quarter of 2026, according to its Quarterly Report on Form 10-Q for the period ended September 30, 2026, filed with the U.S. Securities and Exchange Commission on October 20, 2026. Revenues rose to $5,612 million from $4,734 million in the third quarter of 2025.
Net income attributable to Cliffs shareholders was $152 million, or $0.26 per diluted share, compared with a loss of $251 million, or $0.51 per diluted share, a year earlier. Adjusted EBITDA reached $612 million, against $143 million in the prior-year quarter. Source: Cleveland-Cliffs Inc., Form 10-Q for the quarter ended September 30, 2026 (api-gw-prd.stocktwits.com).
The company attributed the improvement primarily to pricing. The price for domestic hot-rolled coil (HRC), which the company describes as the most significant index affecting its revenues and profitability, averaged $1,195 per net ton in the third quarter of 2026. This was a 42% increase from the third quarter of 2025 and the highest quarterly average per net ton since the second quarter of 2022.
Cleveland-Cliffs reported an average selling price of $1,177 per net ton of steel products in the quarter, compared with $1,032 a year earlier. Steelmaking revenues increased to $5,447 million from $4,561 million, while steel product shipments rose 3% to 4,150 thousand net tons. Hot-rolled steel shipments increased 28% year on year.
Trade policy remains a central factor in the company's outlook. According to the filing, President Trump's administration implemented 50% tariffs on steel imports from all major steel-producing countries during 2025. In early April 2026, a proclamation adjusted the Section 232 tariffs, maintaining the 50% rate on steel products and extending it to the full value of articles of iron and steel, including pipe and tube products.
The company stated that year-to-date total steel imports through August 2026 declined 15% compared with the same period of 2025, and that finished steel import levels in the third quarter remained significantly below historical levels. Cleveland-Cliffs also said that Canada has imposed tariff-rate quotas on steel imports and that the Department of Finance Canada announced in the second quarter of 2026 an extension of the regime through June 2027. Demand indicators cited in the filing were mixed.
North American light vehicle production in the third quarter of 2026 was approximately 3.8 million units, down from approximately 4.0 million units in the third quarter of 2025. U.S. light vehicle sales averaged a seasonally adjusted annualized rate of 16.4 million units in the quarter, according to the company. Direct automotive revenues rose to $1,541 million from $1,356 million, and the company said its direct automotive shipments in the quarter were the highest since the third quarter of 2023.
The filing also references a 25% tariff on imports of automobiles and certain automobile parts implemented during 2025. On the cost side, the company reported that the busheling scrap price averaged $465 per long ton in the third quarter of 2026, above the prior annual ten-year average of approximately $400 per long ton. Cleveland-Cliffs expects scrap supply to tighten, citing decreasing prime scrap generation, growth in U.S. electric arc furnace capacity, reduced metallics import availability and supply chain disruptions.
As a company with a primarily blast furnace footprint that sources most of its iron feedstock internally from its mining and pelletizing operations in Michigan and Minnesota, Cleveland-Cliffs said higher scrap prices strengthen its competitive position. The filing also notes that the steel industry faces elevated freight rates, electricity, gas and other utility costs, and that the war with Iran has increased global steel costs and freight rates, which the company expects to make imports less attractive. Financially, the company reported net cash provided by operating activities of $129 million for the first nine months of 2026, compared with a use of $449 million a year earlier.
Cash paid for capital expenditures was $461 million in the period, and the company anticipates total capital expenditures of approximately $1.0 billion over the next 12 months. Total principal amount of debt stood at $7,712 million as of September 30, 2026, including $834 million drawn under the asset-based revolving credit facility, which has a maximum borrowing base of $4.75 billion and matures in June 2028. Cleveland-Cliffs cited liquidity of $3.2 billion, consisting of cash and availability under the ABL Facility.
The company did not repurchase any common shares during the first nine months of 2026 and had $1.4 billion remaining under its share repurchase authorization. The filing provides sensitivity figures for the company's derivative positions. A hypothetical 10% change in the HRC price would have a negative effect of $72 million on the fair value of its outstanding derivative instruments, and a 25% change would have a negative effect of $179 million, according to the company.
Cleveland-Cliffs also estimated $130 million of net losses on its HRC sales swaps that will be reclassified from accumulated other comprehensive income into revenues during the next 12 months, based on September 30, 2026 fair values. Strategic initiatives disclosed in the filing include a Memorandum of Understanding with POSCO Holdings, which the company describes as a potential strategic partnership. The company stated that there can be no assurance that definitive agreements will be executed or that the partnership will proceed as expected.
UBS is acting as financial advisor on the potential transaction. The company also reported that the U.S. Department of Energy established a framework to finalize negotiations for its Middletown Works investment, which involves a total investment of $1 billion shared equally between Cleveland-Cliffs and the DOE, with a previously awarded $500 million DOE grant rescoped.
The project is expected to be completed in 2030. In addition, the company reported that it has indefinitely idled the finishing operations at its Hamilton Works facility in Canada, citing weak demand for value-added sheet products and continued import presence in the Canadian market. On decarbonization, the company stated that its average Scope 1 and 2 emissions for integrated mills declined from 1.82 to 1.64 metric tons of CO2 equivalent per metric ton of crude steel produced in 2025, compared with 2020 levels.
The company also noted that it is in good-faith negotiations with the United Steelworkers (USW) to renew various collective bargaining agreements across its mining and steelmaking operations, covering more than 18,000 employees. All figures are drawn from the company's unaudited Form 10-Q filing, which also contains forward-looking statements subject to risks including steel price volatility, trade policy developments and the outcome of the POSCO discussions. Source: Cleveland-Cliffs Inc., Form 10-Q for the quarter ended September 30, 2026, filed October 20, 2026.
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