How Bad Would Falling Steel Prices Be For Cleveland-Cliffs Stock?

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The worry for Cleveland-Cliffs (CLF) holders is that the steel prices behind the company’s third-quarter rebound may not last. Management reported $612 million of adjusted EBITDA for the quarter on its October 19, 2026 call, more than doubling its second-quarter result. The company then laid out a path to more than $4 billion of adjusted EBITDA in 2027, assuming market conditions are like the third quarter’s. Management also said global overcapacity remains enormous. If steel prices slip back instead, how much cash would that cost Cleveland-Cliffs, and how hard have its shares fallen in past market shocks?

How Much A Weaker Year Cost Cleveland-Cliffs

A year resembling the one that ended in June 2026, before third-quarter prices rose, would cost Cleveland-Cliffs real cash, though well short of what it has on hand. Over those twelve months, the company’s free cash flow was negative $857 million, meaning it spent more than it took in. It also ran a $797 million operating loss, so nothing was left over to cover its $609 million interest expense. Measured against the $3.2 billion of liquidity reported at the end of September, repeating that performance would consume a little more than a quarter of the total. Liquidity is a broader measure than cash, which stood at just $70 million at the end of June, the latest balance sheet in our data.

That interest expense comes from a heavy debt load. Cleveland-Cliffs held $7.7 billion in total debt at the end of June, against $70 million of cash. That debt equals 98.8% of the company’s market value, compared to 19.7% for the S&P 500.

The shares have also swung harder than the broader market before. During the tariff shock between February and June 2025, Cleveland-Cliffs stock fell as much as 51%, against 19% for the S&P 500.

Cleveland-Cliffs Has Gains Lined Up Beyond The Pricing Index

Not all of the 2027 gain described by management depends on the price of steel. During the October 19 call, management said customer contract renegotiations should add more than $1 billion of EBITDA year over year, before any change in the pricing index. The company said that more than half of its clients, around 55% to 60%, had already signed, and it expects everything done by Thanksgiving.

Management has other steps underway. Most major properties the company put up for sale are contracted to close in the fourth quarter, coal contract negotiations concluded at rollover pricing for 2027, and management said it is not going to issue stock. The company said it has become more confident it can bring leverage below its target of 2 to 2.5 times EBITDA by the middle of 2027, and it said paying down debt will remain its first use of free cash flow.

When asked on the call what exactly had changed since the second quarter, management said contract renegotiations were going very well and that some deals were already done. It declined to provide specifics.

What Management Expects For The Fourth Quarter

Cleveland-Cliffs is expected to report its next results on or around February 8, 2027, and management has already issued forecasts for the fourth quarter. The company expects average selling prices to rise by about $45 to $55 a ton, much as they did in the third quarter, while costs rise slightly. Against management’s guide of $715 million, fourth-quarter adjusted EBITDA is the figure to watch in that report.

How To Act On CLF?

Not necessarily on Cleveland-Cliffs alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here is one company from Cleveland-Cliffs’ own industry that has beaten it. Over the five years to October 2026, Nucor stock rose 167%, while Cleveland-Cliffs stock fell 37%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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