Cleveland-Cliffs Faces $80M Q1 Energy Loss, Forecasts $60/Ton Price Rise
Cleveland-Cliffs reported a $80 million EBITDA drag from an extreme cold snap in Q1, yet achieved $4.92 billion revenue and 4.1 million steel shipment tons. Management forecasts Q2 average selling prices up $60 per ton and expects free cash flow as automotive bookings reach highest levels in two years.
1. Q1 Results and Energy Cost Impact
Cleveland-Cliffs reported an $80 million negative EBITDA impact in Q1 due to a February cold snap driving natural gas prices lock-in at peak levels. Despite this, the company posted $4.92 billion in revenue and shipped 4.1 million net tons of steel.
2. Automotive Demand and Trade Enforcement
Automotive OEMs have filled the order book with steel bookings at two-year highs as supply certainty outweighs aluminum fragility. Section 232 and 'melted and poured' mandates have cut U.S. steel imports to lowest since 2009, supporting predictable domestic market conditions.
3. Q2 Outlook and Pricing
Management expects Q2 average selling prices to rise by $60 per ton sequentially and forecasts a return to free cash flow as energy costs normalize and accounts receivable from Q1 are collected. Automotive shipments have already reached their highest quarterly level in nearly two years.
4. Operational Optimization and Modernization
The company is transitioning to AI-assisted production planning to optimize sequencing and order entry and is consolidating output by idling lower-utilization plate mills at Burns Harbor and Gary. Major modernization projects at Butler and Middletown Works remain on track, with Middletown focusing on energy-efficient blast furnace configuration.