Why Has Cleveland-Cliffs Stock Dropped 25%?

In the past month, Cleveland-Cliffs (NYSE:CLF) share price has fallen by roughly 25%, a sharp move for a company that had been riding favorable trade-policy headlines and promises of automotive-steel demand recovery.

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Why the drop

Several company-specific issues and broader headwinds have combined to drive the drop in CLF’s stock:

• Revenue & margin pressures. In Q3 2025, Cleveland-Cliffs reported revenues of about US$4.7 billion, compared to US$4.9 billion in Q2 of the same year. The adjusted net loss was US$ 223 million, or US$ 0.45 per diluted share. Although the adjusted EBITDA improved to US$ 143 million from US$ 94 million in the prior quarter, the fact remains the company is still loss-making and revenue is slightly down quarter to quarter.
• Weak selling price & product mix headwinds. In the steel-making segment, average net selling price per net ton was US$ 1,032 in Q3, down slightly from US$ 1,045 a year earlier. Though shipment volumes rose to 4.0 million net tons from 3.84 million a year earlier, the cost pressures and the margin remained thin (cash margin US$205 million for Q3 vs US$110 million a year earlier) in a challenging environment.
• External demand & macro risk. The broader steel sector faces cyclical demand issues (construction, manufacturing, auto) and exposure to import competition.
• Strategic story vs execution gap. While CLF has announced strategic initiatives (e.g., exploring rare-earth mineralization at Michigan & Minnesota sites, a memorandum of understanding with a global steel producer) investors appear stepping back until more concrete results are delivered. When a company is still loss-making and guiding cautiously, the upside narrative may lose momentum.

All these factors have contributed to the 25% drop in the stock — reflecting a reassessment of risk, not just upside potential. Also see, Would You Still Hold Cleveland-Cliffs Stock If It Fell Another 30%?

What’s next

Looking ahead, there are several key themes and metrics that will determine whether the stock stabilizes, rebounds, or continues to decline.

• Execution of strategic initiatives: CLF is exploring rare-earth mineral potential on mining sites in Michigan and Minnesota. Also, they have an MOU with a major global steel producer that could potentially accelerate growth if converted into a binding deal. Execution of these will matter for investor confidence.
• Margins & steel demand recovery: With 30% of the steel-making revenues in Q3 coming from the automotive market (≈ US$1.4 billion of the steel segment), automotive recovery is a strong lever. However, CLF must show consistent margin improvement, cost-reduction, and stabilized pricing. Their guidance for cost reductions (e.g., target ~US$50/ton unit cost savings compared to 2024) is a sign to watch.
  Financial health & liquidity management: CLF ended Q3 2025 with about US$ 3.1 billion in consolidated liquidity. While that gives a buffer, persistent losses and the cyclical nature of steel mean that any further misstep could heighten investor concerns on capital dilution, debt, or margin erosion.
• Valuation & risk-reward balance: Given the stock drop, some risk may already be priced in. But upside will hinge on positive surprises — a binding deal, rare-earth proof-of-concept, stronger than expected steel demand. Conversely, continued flat or negative performance could lead to further declines.

Takeaway

The 25% drop in CLF’s stock over the past month signals that the market is shifting from optimism about the narrative to scrutiny of execution. The company has interesting strategic ambitions, but the near-term challenge is showing that the story can translate into improved earnings, margins, and cash flow. We currently value CLF stock at $11, in line with the market price.

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