Full Transcript: Cleveland-Cliffs Q2 2026 Earnings Call

Cleveland-Cliffs (NYSE: CLF ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Cleveland-Cliffs returned to positive free cash flow and tripled adjusted EBITDA from Q1; Q2 adjusted EBITDA was $286 million, with a strong outlook for Q3 ($575 million expected). Key strategic initiatives included the expiration of an uneconomic slab supply contract, improvements in automotive demand, and footprint optimization. The company is focusing on higher pricing and cost reductions. S.

trade policies, particularly Section 232, on domestic steel utilization and reshoring of manufacturing. The company emphasized its strong position in the automotive sector, being a top supplier to major clients like Toyota and General Motors, and an increase in steel shipments to automotive clients. Cleveland-Cliffs is negotiating to renew its collective bargaining agreement with the United Steelworkers union and has appointed Celso as President and CFO. Stelco's Canadian operations showed improvements due to trade policy changes, but challenges remain in the galvanized market.

Future growth is expected from fixed-price contract resets, Stelco improvements, and AI-based cost reductions. 5x by next year. The company has begun discussions with Posco, but no immediate transactions are planned unless valuation and structure are favorable. Full Transcript Darrell, Operator Good morning, ladies and gentlemen.

My name is Darrell, and I am your conference facilitator. Today I would like to welcome everyone to Cleveland-Cliffs' second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

The Company reminds you that certain comments made on today's call will include predictive statements that are intended to be made as forward-looking within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. Although the Company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that can cause actual results to differ materially. Important factors that can cause results to differ materially are set forth in reports on Forms 10-K and 10-Q and news releases filed with the SEC, which are available on the Company's website. com.

At the conclusion of the call, it will be archived on the website and available for replay. The Company will also discuss results excluding certain special items. Reconciliation for Regulation G purposes can be found in the earnings release which was published this morning. At this time I would like to introduce Lourenco Goncalves, Chairman and Chief Executive Officer.

Lourenco Goncalves — Chief Executive Officer Thank you, Gary, and good morning to everyone. After several quarters of talking about the future earnings power of this Company, we can finally point to tangible evidence that the progression we have been forecasting is now reality. During the second quarter, we returned to positive free cash flow and tripled our adjusted EBITDA from the first quarter. While the second quarter represents meaningful progress, it still understates where this Company is headed over the coming quarters.

Q2 maintenance outages and our lagged contracts still did not allow us to demonstrate the full capability of our asset base. That will be more visible in Q3, in which we are expecting to more than double our Q2 EBITDA due to our healthy backlog and improved pricing. The second half of 2026 will look substantially better than the first half of the year. With our third quarter adjusted EBITDA guidance of $575 million, we have a situation where higher prices, lower costs, and higher shipping volumes will all be converging at once.

Weather-related impacts are behind us, finishing lines are full, and pricing remains strong. Better yet, at the current curve for steel, we expect the fourth quarter to further outperform the third quarter in adjusted EBITDA, with even more improvements to come in 2027 when profits were below our standard. At this time last year, I laid out three key areas of improvement that would bring us back to a respectable level: automotive volume recovered, footprint optimization, and the expiration of the uneconomic slab supply contract we had in place with ArcelorMittal Calvert.

These three factors have all now materialized, and with stronger pricing, the improvements we see are even better than previously forecasted. Automotive demand deserves special mention. Cliffs continues to be the supplier of choice for the automotive sector in the United States, illustrated by the fact that we have received the top supplier award from both Toyota and General Motors so far this year. During the quarter, our shipments of steel to our automotive clients were the highest in the last two years.

Our finishing lines, which ran at suboptimal utilization levels for the last couple years, are now back to running at a healthy level of utilization with a favorable impact on our costs. Thanks to our multi-year contracting strategy, the ongoing reshoring of automotive production into the United States, and major supply chain disruption suffered by competitors, our automotive coating volumes are back to the strong levels we saw back in 2023. This improving situation in both steel and automotive demand can be attributed to the long overdue trade policies we now have in place in the United States. Section 232 has been