Oct 19, 2026 earnings call — Q3 recovery and contract renewals
Q3 adjusted EBITDA was $612 million and management expects Q4 adjusted EBITDA of $715 million.
Revenue $5.6B (est $5.7B) · EPS $0.28 (est $0.21)
Key quotes
"All these contracts reset on January 1 of next year, and nearly all of these customers want more steel under contract in 2027 than in 2026."
"3 months ago, we guided to an expectation of $575 million of adjusted EBITDA for Q3 of 2026 And today, we reported $612 million As we wrap up 2026, we expect to generate $715 million in Q4,"
"With that, we are postponing the Burns Harbor C-Blast furnace reline from mid-27 to April 2028."
Analyst Q&A 7
CapEx and production capacity
Q (Timna Tanners · Wells Fargo): Analyst asked for more detail on next year CapEx and whether the Q4 asset sale is $370 million. He also asked how much extra tonnage the company can bring in 2027 to meet tight market demand.
A: Management said 2026 CapEx is expected to be about 700 million and will pick up in Q4 as strategic projects start. They said 2027 CapEx is expected to be just over a billion driven by announced projects and Burns Harbor prep. They described product-by-product plans to add capacity (Butler +25% for electrical steel, Burns Harbor galvanizing early 2027) and said contracts are moving to take-or-pay with many clients already signed.
"As we look forward to next year, CapEx is expected to exceed just over a billion dollars." — Celso L. Goncalves Jr. (CFO)
Contract renewals and Q4 costs
Q (Nick Giles · B. Riley): Analyst asked how much of the index-linked and fixed-price renegotiations are already concluded and for clarity on what the Q4 guide assumes on costs and ASPs (and what is in the $250 million cost impact).
A: Management said more than half of customers have agreed to the new contract terms and they have seen zero clients refuse so far, expecting to finish by Thanksgiving. They said Q3 cost per ton fell by $17 versus guide driven by higher production, but Q4 costs should increase slightly due to repairs, energy, alloy and diesel. They expect ASPs in Q4 to increase about $45 to $55 a ton, similar to Q3.
"So when I say 55%, I am trying to say more than 50." — C. Lourenco Goncalves (CEO·CHAIR)
Working capital and asset sale timing
Q (Carlos de Alba · Morgan Stanley): Analyst asked what to expect for working capital at year end and whether the 500 million from asset sales will close in Q4. He also asked whether an equity raise is being considered to strengthen the balance sheet.
A: Management said working capital should be neutral in Q4 after a Q3 build of 160 million (inventory and AR increases partly offset by payables). They said all asset sales are contracted and expected to close in Q4, though some extensions can happen. On balance sheet strategy, management prefers using operating cash to pay down debt, targeting the ABL first and reducing bonds rather than issuing stock.
"As it relates to asset sales, everything is contracted and, expected to close here in Q4." — Celso L. Goncalves Jr. (CFO)
When to restart Dearborn plant
Q (Nicklaus Cash · Goldman Sachs): Analyst asked what needs to change before restarting Dearborn becomes economic given tight automotive volumes and favorable pricing. He also asked for more color on the increased repricing opportunity.
A: Management said Dearborn will only come back when customers change their production choices (for example, when key models are moved back to U.S. production) and when automakers choose steel over aluminum for certain vehicles. They said clients—not the company—will dictate the timing. On repricing, they said renegotiations are going well and deals are already done but declined to give specifics.
"So no need for Dearborn until that happens." — C. Lourenco Goncalves (CEO·CHAIR)
Contract mix and auto volumes
Q (Samuel McKinney · KeyBanc): Analyst asked if the mix of fixed and index contracts will change next year as mills try to sell more spot and also why Q3 volumes rose less than their prior outlook and whether that issue remains for Q4.
A: Management said contracts are switching to take-or-pay minimums and many clients are even asking to raise their minimums; fixed prices are giving way to index contracts with low discounts. On the volume miss, they said automotive reshoring is happening but in a disorganized way, so OEM scheduling issues forced Cliffs to reschedule production and reduced volumes; they expect renewals with automotive clients soon.
"So what happens that more than the opposite, clients are asking to raise their minimums." — C. Lourenco Goncalves (CEO·CHAIR)
Impact of slab contract expiration
Q (Albert Realini · Jefferies): Analyst asked whether additional EBITDA uplift remains from the expiration of the slab contract or if the benefit has already been realized in current run rates.
A: Management said the benefit of not selling slabs is visible in their results. They explained they had a 5-year slab supply deal that expired and they did not renew it, and that change improved their numbers.
"The fifth anniversary came, and, we did not renew." — C. Lourenco Goncalves (CEO·CHAIR)
Shipments versus market and Canada spreads
Q (William Peterson · JPMorgan): Analyst asked how to think about shipment growth next year versus the market—whether Cliffs expects share gains or just market growth—and asked about value-added spreads between Canada and the U.S.
A: Management said reshoring is happening and demand is growing while imports have largely disappeared, so domestic supply must meet that growth. They said many announced new plants are years away, and buyers will rely on reliable domestic suppliers today. On Canada, they said the TRQs worked quickly for hot rolled, but galvanized imports and policy actions created near-term problems for Canadian workers; they expect cooler heads to prevail.
"First of all, everything that the Trump administration has implemented in terms of reshoring manufacturing is really happening." — C. Lourenco Goncalves (CEO·CHAIR)