Cliffs Q4 2025 Cleveland-Cliffs Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Cleveland-Cliffs Inc Earnings Call
2025 earnings conference call.
All lines have been placed on mute to prevent any background noise.
After the speakers remarks, there'll be a question and answer session.
The company remind 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 Privacy 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 risk to uncertainties that could cause actual results of different material.
Important factors that could cause results of different material or set forth reports on form 10K and 10 q and news releases filed with SEC which are available on the company's website.
Today's conference call is also available and being broadcast on Cleveland clips.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 specific special items reconciliation for regulation. G purposes can be found in the earnings release, which was published this morning.
At this time, I'd like to introduce Renzo Gonzalez, chairman president and chief executive officer.
Thank You, Gavin and good morning everyone.
After several years of no, real actions taken to reverse the systematic, destruction of the American industrial bases. We finally saw in 2025 a federal Administration that values the importance of preserving and growing American Manufacturing.
That said in 2025 throughout the entire year, we were still exposed to a lot of Steel Imports poisoning our domestic Market. Creating a demand Gap that negatively impacted our Institute shipments and asset utilization.
In response to these challenging conditions, we made difficult decisions on shutting down assets that were dragging us down.
Also, in 2025, we terminated our our index based is lab supply contract with arelo mro
The contract became very onerous in its final year, when the Brazilians lab price index unnaturally separated from the US, finished the steel prices.
The factors that waited on our performance in 2025 were well known and addressable.
As we entered 20126, these problems have either been resolved or clearly improving.
We have already secured more business from our Automotive clients and that will show throughout 2026 as the oems reshore production back to the United States.
Also very important at the end of 2025, the Canadian government has finally made a move to restrict the importance to you into Canada and that has created positive momentum. In 2026 for our Canadians to be ediary is stelco
Is the best confirmation that the business environment has already started to improve.
Section 232 tariffs at 50% are of course, a leading driver of this impact.
We are seeing the benefit of melted and poured the requirements in driving demand for domestically produced Steel.
A lot of the new governing capacity in the US has come online and taking share from Imports, reducing the amount of hot rolled availability in the marketplace.
We have been able to use the melting capacity previously, allocated to orders of low margins labs to few orders of higher margin flat rolled products.
that said due to melted and poured requirements, we anticipate continued demand for our domestically produced these labs
We remain open to being a domestic's lab supplier to those in need of domestic Labs as long as we can agree on a pricing construct, that makes sense.
With all these positive influence the spots. Still price is sitting at a 2-year High
Clearing the reset cold weather stretch across the Midwest.
Is scrap prices in the electricity. Prices have continued to grind higher.
Which has increased the cost structure of the Minimus to a greater level than our own.
This has given us a cost Advantage, as we generate a lot of our own power and use much less scrap.
Lourenço Gonçalves: Domestically produced steel. A lot of the new galvanizing capacity in the US has come online and taken share from imports, reducing the amount of hot-rolled availability in the marketplace. We have been able to use the melting capacity previously allocated to orders of low-margin slabs to a few orders of higher-margin flat-rolled products. That said, due to melt import requirements, we anticipate continued demand for our domestically produced slabs. We remain open to being a domestic slab supplier to those in need of domestic slabs, as long as we can agree on a pricing construct that makes sense. With all this positive influence, the spot steel price is sitting at a 2-year high. Layering in the recent cold weather stretch across the Midwest, scrap prices and electricity prices have continued to grind higher, which has increased the cost structure of the mini-mills to a greater level than our own.
Lourenço Gonçalves: Domestically produced steel. A lot of the new galvanizing capacity in the US has come online and taken share from imports, reducing the amount of hot-rolled availability in the marketplace. We have been able to use the melting capacity previously allocated to orders of low-margin slabs to a few orders of higher-margin flat-rolled products. That said, due to melt import requirements, we anticipate continued demand for our domestically produced slabs.
Even with our sizable fixed price Automotive footprint because of our vertically integrated nature and they also significant size of our no Automotive customer base.
A lot of the new governing capacity in the U.S. has come online and is taking share from imports, reducing the amount of hot-rolled availability in the marketplace.
Please profitability is more impact by spots to prices than any other company in our industry.
Set another way when hot rolled coil prices rally, we Cleveland Cliffs benefits.
We have been able to use the melting capacity previously allocated to orders of low-margin slabs to a few orders of higher-margin flat-rolled products.
Lourenço Gonçalves: We remain open to being a domestic slab supplier to those in need of domestic slabs, as long as we can agree on a pricing construct that makes sense. With all this positive influence, the spot steel price is sitting at a 2-year high. Layering in the recent cold weather stretch across the Midwest, scrap prices and electricity prices have continued to grind higher, which has increased the cost structure of the mini-mills to a greater level than our own.
That said, due to melted and poured requirements, we anticipate continued demand for our domestically produced these labs.
Auto is still our core and market and when domestic production levels of car trucks and SUVs remain weak for an extended period. The impacts on us is unavoidable.
We remain open to being a domestic lab supplier to those in need of domestic labs, as long as we can agree on a pricing construct that makes sense.
Vehicle production in the United States was down in 2025 for the third consecutive year.
but with, with this new era of policy-driven reshoring,
With all these positive influences in the spots, still, price is sitting at a two-year high.
They returned to pre-covid levels of a vehicle production in the United States is inevitable.
Layer in the recent cold weather stretch across the Midwest.
Is scrap prices in the electricity? Prices have continued to grind higher.
Lourenço Gonçalves: This has given us a cost advantage, as we generate a lot of our own power and use much less scrap. Even with our sizable fixed-price automotive footprint, because of our vertically integrated nature and the also significant size of our non-automotive customer base, Cleveland-Cliffs' profitability is more impacted by spot steel prices than any other company in our industry. Said another way, when hot-rolled coil prices rally, we, Cleveland-Cliffs, benefit. Automotive is still our core end market, and when domestic production levels of car trucks and SUVs remain weak for an extended period, the impact on us is unavoidable. Vehicle production in the United States was down in 2025 for the third consecutive year, but with this new era of policy-driven reshoring, the return to pre-COVID levels of vehicle production in the United States is inevitable.
Lourenço Gonçalves: This has given us a cost advantage, as we generate a lot of our own power and use much less scrap. Even with our sizable fixed-price automotive footprint, because of our vertically integrated nature and the also significant size of our non-automotive customer base, Cleveland-Cliffs' profitability is more impacted by spot steel prices than any other company in our industry. Said another way, when hot-rolled coil prices rally, we, Cleveland-Cliffs, benefit.
throughout 2025, we geared up for this inevitability by signing multi-year fixed price contracts, with all major, OEM customers,
Which has increased the cost structure of the Minimus to a greater level than our own.
This has given us a cost advantage, as we generate a lot of our own power and use much less scrap.
Disagreements increased, our market share and secured the high margin business, that will flow through in 2026.
We have the installed capacity available right now.
Clips does not need to build new plants.
Even with our sizable fixed price of the water footprint because of our vertically integrated nature, and they also significant size of our no Automotive customer base.
Unfortunately, the transition to Cliffs is still from the previous suppliers is not instantaneous.
Please note, our profitability is more impacted by spot prices than any other company in our industry.
Lourenço Gonçalves: Automotive is still our core end market, and when domestic production levels of car trucks and SUVs remain weak for an extended period, the impact on us is unavoidable. Vehicle production in the United States was down in 2025 for the third consecutive year, but with this new era of policy-driven reshoring, the return to pre-COVID levels of vehicle production in the United States is inevitable.
It takes some time. Before we see the full impact of this change overs, but we will see it in 2026.
Set another way when hot rolled coil prices rally, we Cleveland Cliffs benefits.
Automotive is still our core and market, and when domestic production levels of cars, trucks, and SUVs remain weak for an extended period, the impacts on us are unavoidable.
The expect combination of this market share gains with an increased domestic. Production of vehicles will be a massive gain for our throughput efficient efficiency costs and ultimately profits.
1 more time.
Vehicle production in the United States was down in 2025 for the third consecutive year.
Differently from our competitors currently building new steel plants or announcing plans to build steel plants.
But with this new era of policy-driven reshoring,
Cleveland Cliffs has production capacity available right now.
Again.
Lourenço Gonçalves: Throughout 2025, we geared up for this inevitability by signing multi-year fixed-price contracts with all major OEM customers. These agreements increased our market share and secured high-margin business that will flow through in 2026. We have the installed capacity available right now. Cleveland-Cliffs does not need to build new plants. Unfortunately, the transition to Cleveland-Cliffs steel from the previous suppliers is not instantaneous. It takes some time before we see the full impact of these changeovers, but we will see it in 2026. The expected combination of these market share gains with an increased domestic production of vehicles will be a massive gain for our throughput, efficiency, costs, and ultimately profits. One more time: differently from our competitors currently building new steel plants or announcing plans to build steel plants, Cleveland-Cliffs has production capacity available right now.
Lourenço Gonçalves: Throughout 2025, we geared up for this inevitability by signing multi-year fixed-price contracts with all major OEM customers. These agreements increased our market share and secured high-margin business that will flow through in 2026. We have the installed capacity available right now. Cleveland-Cliffs does not need to build new plants. Unfortunately, the transition to Cleveland-Cliffs steel from the previous suppliers is not instantaneous. It takes some time before we see the full impact of these changeovers, but we will see it in 2026.
They returned to preco levels of a vehicle production in the United States is inevitable.
Cliffs does not need to build plants to be ready in 2028 2029 or 2030.
throughout 2025, we geared up for this inevitability by signing multi-year fixed price contracts, with all major, OEM customers,
The incremental volume demanded by the automotive industry can and will be absorbed by our existing footprints.
These agreements increased our market share and secured the high-margin business that will flow through in 2026.
We have the installed capacity available right now.
that volume carries attractive, incremental margins, and thanks to our multi-year, fixed price contracts, with all major, Automotive, oems
Cliffs does not need to build new plants.
There will be no pressure on the price of cars to consumers in the US that could even remotely be attributed to the price of Cliff's Steel.
Unfortunately, the transition to Cliffs from the previous suppliers is not instantaneous.
Lourenço Gonçalves: The expected combination of these market share gains with an increased domestic production of vehicles will be a massive gain for our throughput, efficiency, costs, and ultimately profits. One more time: differently from our competitors currently building new steel plants or announcing plans to build steel plants, Cleveland-Cliffs has production capacity available right now.
It takes some time. Before we see the full impact of this change overs, but we will see it in 2026.
another example of the progress, we continue to demonstrate in automotive is our successful replacement of aluminum with steel using aluminum forming equipment,
Our Cliffs steel is now stamped into exposed Automotive components using existing forming equipment, on a production scale basis.
The expected combination of this market share gains with an increased domestic production of vehicles will be a massive gain for our throughput, efficiency, costs, and ultimately, profits.
1 more time.
Differently from our competitors currently building new steel plants or announcing plans to build steel plants.
This Cleveland Cliffs development demonstrates that the change over from aluminum to steel. Can be easily done without requiring new tooling or capital investment from the customer.
Lourenço Gonçalves: Again, Cleveland-Cliffs does not need to build plants to be ready in 2028, 2029, or 2030. The incremental volume demanded by the automotive industry can and will be absorbed by our existing footprint. That volume carries attractive incremental margins, and thanks to our multi-year fixed-price contracts with all major automotive OEMs, there will be no pressure on the price of cars to consumers in the U.S. that could even remotely be attributed to the price of Cleveland-Cliffs steel. Another example of the progress we continue to demonstrate in automotive is our successful replacement of aluminum with steel using aluminum-forming equipment. Our Cleveland-Cliffs steel is now stamped into exposed automotive components using existing forming equipment on a production-scale basis. This Cleveland-Cliffs development demonstrates that the changeover from aluminum to steel can be easily done without requiring new tooling or capital investment from the customer.
Lourenço Gonçalves: Again, Cleveland-Cliffs does not need to build plants to be ready in 2028, 2029, or 2030. The incremental volume demanded by the automotive industry can and will be absorbed by our existing footprint. That volume carries attractive incremental margins, and thanks to our multi-year fixed-price contracts with all major automotive OEMs, there will be no pressure on the price of cars to consumers in the U.S. that could even remotely be attributed to the price of Cleveland-Cliffs steel.
Cleveland-Cliffs has production capacity available right now.
Again, Cliffs does not need to build plants to be ready in 2028, 2029, or 2030.
That significantly lowers the barrier to adoption and expands the addressable market for our Cliffs steel products. Particularly as the aluminum supply chain has suffered severe disruption with a succession of fire events.
Clearly, exposing its weakness.
The incremental volume demanded by the automotive industry can and will be absorbed by our existing footprints.
That volume carries attractive, incremental margins, and thanks to our multi-year, fixed-price contracts with all major automotive OEMs.
We operate in a market that companies from around the world are spending billions of dollars to enter.
Lourenço Gonçalves: Another example of the progress we continue to demonstrate in automotive is our successful replacement of aluminum with steel using aluminum-forming equipment. Our Cleveland-Cliffs steel is now stamped into exposed automotive components using existing forming equipment on a production-scale basis. This Cleveland-Cliffs development demonstrates that the changeover from aluminum to steel can be easily done without requiring new tooling or capital investment from the customer.
We are already here.
There will be no pressure on the price of cars to consumers in the US that could even remotely be attributed to the price of Cliffs’ steel.
We already have the assets.
We already have the workforce.
As manufacturing activity in the United States continues to record.
Cleveland Cliffs is the best position to benefit with that required massive Capital Investments.
Our Clips steel is now stamped into exposed automotive components using existing forming equipment on a production-scale basis.
I want to drill down on another factor that impacted our 2025 performance.
And that was the change in Dynamics in the Canadian steel Market.
For the last several years, even under the previous tariff regime.
Lourenço Gonçalves: That significantly lowers the barrier to adoption and expands the addressable market for our Cleveland-Cliffs steel products, particularly as the aluminum supply chain has suffered severe disruption with a succession of fire events clearly exposing its weakness. More than ever before, Cleveland-Cliffs is seeing a clear path to replace aluminum with made-in-U.S.A. steel in major applications. We operate in a market that companies from around the world are spending billions of dollars to enter. We are already here. We already have the assets. We already have the workforce. As manufacturing activity in the United States continues to recover, Cleveland-Cliffs is the best positioned to benefit without requiring massive capital investments. I want to drill down on another factor that impacted our 2025 performance, and that was the change in dynamics in the Canadian steel market.
Lourenço Gonçalves: That significantly lowers the barrier to adoption and expands the addressable market for our Cleveland-Cliffs steel products, particularly as the aluminum supply chain has suffered severe disruption with a succession of fire events clearly exposing its weakness. More than ever before, Cleveland-Cliffs is seeing a clear path to replace aluminum with made-in-U.S.A. steel in major applications. We operate in a market that companies from around the world are spending billions of dollars to enter.
This Cleveland-Cliffs development demonstrates that the changeover from aluminum to steel can be easily done without requiring new tooling or capital investment from the customer.
Pricing in the Canadian markets moved the intended with the US market.
We acquired this Telco on November 1st 2024.
4 days before President. Trump's election.
That significantly lowers the barrier to adoption and expands the addressable market for our Cliffs steel products. Particularly as the aluminum supply chain has suffered severe disruption with a succession of fire events. Clearly exposing its weakness.
And immediately took stelo out of the US market redirecting stock was output 100% to the Canadian Market.
More than ever before, Google and Cliffs are seeing a clear path to replace aluminum with made-in-USA steel in major applications.
This was not driven by policy change, but rather our conviction on what's in the best interest for our shareholders and our employees on both sides of the Border.
Lourenço Gonçalves: We are already here. We already have the assets. We already have the workforce. As manufacturing activity in the United States continues to recover, Cleveland-Cliffs is the best positioned to benefit without requiring massive capital investments. I want to drill down on another factor that impacted our 2025 performance, and that was the change in dynamics in the Canadian steel market.
We operate in a market that companies from around the world are spending billions of dollars to enter.
Even the all surprising change in Canada, relations with the US should not have affected this strategy at all.
We are already here.
But that's not how it played out.
We already have the assets.
We already have the workforce.
As manufacturing activity in the United States continues to record.
All of a sudden Canada became a Dumping Ground for producers, trying to avoid us Taps and downstream. Canadian manufacturing was negatively a impacted as well.
Cleveland-Cliffs is in the best position to benefit without requiring massive capital investments.
Canadian pricing decoupled from us pricing.
I want to drill down on another factor that impacted our 2025 performance.
Lourenço Gonçalves: For the last several years, even under the previous tariff regime, pricing in the Canadian market moved in tandem with the US market. We acquired Stelco on 1 November 2024, four days before President Trump's election, and immediately took Stelco out of the US market, redirecting Stelco's output 100% to the Canadian market. This was not driven by policy change, but rather our conviction on what's in the best interest for our shareholders, and our employees on both sides of the border. Even the altogether surprising change in Canada relations with the US should not have affected this strategy at all, but that's not how it played out. All of a sudden, Canada became a dumping ground for producers trying to avoid US tariffs, and downstream Canadian manufacturing was negatively impacted as well. Canadian pricing decoupled from US pricing.
Lourenço Gonçalves: For the last several years, even under the previous tariff regime, pricing in the Canadian market moved in tandem with the US market. We acquired Stelco on 1 November 2024, four days before President Trump's election, and immediately took Stelco out of the US market, redirecting Stelco's output 100% to the Canadian market. This was not driven by policy change, but rather our conviction on what's in the best interest for our shareholders, and our employees on both sides of the border.
And that was the change in dynamics in the Canadian steel market.
Until recently, the Canadian government insisted on doing nothing about this unsustainable situation, preferring to watch it is still industry. Flounder for the sake of globalism.
For the last several years, even under the previous tariff regime.
Pricing in the Canadian Market moved in tending with the US market.
After raising the alarm, louder and louder, we finally saw, the Canadian government come around late in the fourth quarter of 2025.
While still in.
We acquired this Telco on November 1, 2024.
Sufficient and limited in scope.
Four days before President Trump's election.
The restrictions implemented were at least able to stop the bleeding.
As a result, we have seen Canadian pricing and shipments improved in the last month.
And immediately took Stelco out of the US market, redirecting stock output 100% to the Canadian market.
Prior to our acquisition, the stock was a low price exporter into the US in the highly disruptive 1. By the way.
Lourenço Gonçalves: Even the altogether surprising change in Canada relations with the US should not have affected this strategy at all, but that's not how it played out. All of a sudden, Canada became a dumping ground for producers trying to avoid US tariffs, and downstream Canadian manufacturing was negatively impacted as well. Canadian pricing decoupled from US pricing.
Even the all-surprising change in Canada, relations with the US should not have affected this strategy at all.
When you look at the big picture, what our acquisition has done to transform and improve the US Marketplace, more than justifies and supports our return on our 2.5 billion dollar.
But that's not how it played out.
Purchase price of stock.
All of a sudden, Canada became a dumping ground for producers trying to avoid U.S. tariffs, and downstream Canadian manufacturing was negatively impacted as well.
Lourenço Gonçalves: Until recently, the Canadian government insisted on doing nothing about this unsustainable situation, preferring to watch its steel industry flounder for the sake of globalism. After raising the alarm louder and louder, we finally saw the Canadian government come around late in Q4 2025. While steel is insufficient and limited in scope, the restrictions implemented were at least able to stop the bleeding. As a result, we have seen Canadian pricing and shipments improve in the last month. Prior to our acquisition, Stelco was a low-price exporter into the US, and a highly disruptive one, by the way. When you look at the big picture, what our acquisition has done to transform and improve the US marketplace more than justifies and supports a return on our $2.5 billion purchase price of Stelco.
Lourenço Gonçalves: Until recently, the Canadian government insisted on doing nothing about this unsustainable situation, preferring to watch its steel industry flounder for the sake of globalism. After raising the alarm louder and louder, we finally saw the Canadian government come around late in Q4 2025. While steel is insufficient and limited in scope, the restrictions implemented were at least able to stop the bleeding. As a result, we have seen Canadian pricing and shipments improve in the last month. Prior to our acquisition, Stelco was a low-price exporter into the US, and a highly disruptive one, by the way. When you look at the big picture, what our acquisition has done to transform and improve the US marketplace more than justifies and supports a return on our $2.5 billion purchase price of Stelco.
Canadian pricing decoupled from US pricing.
In the fourth quarter, we revealed that our memorandum of understanding partner was PCO. Korea's largest is still maker and the the world's third largest to make her outside of China.
Until recently, the Canadian government insisted on doing nothing about this unsustainable situation. Referring to watch, it is still industry. Flounder for the sake of globalism.
The partnership with Cliffs, we will allow postco to support and grow its established Us customer base while ensuring that its products meet us counter of origin, melted and poured requirements.
After raising the alarm, louder and louder, we finally saw the Canadian government come around late in the fourth quarter of 2025.
While still insufficient and limited in scope.
The restrictions implemented were at least able to stop the bleeding.
Our collaboration represents a model of how a lies can deepen Industrial Corporation under Fair, and transparent Street principles, and it aligns with us policy goals to strength, domestic industry, and attract foreign investment.
As a result, we have seen Canadian pricing and shipments improved in the last month.
Continues to conduct due diligence. As part of our recently announced the Strategic partnership.
Both parties are focused on a structuring. A transaction that is highly accretive in the strategically compelling for each company.
Prior to our acquisition was a low price. Exporter into the US in the highly disruptive 1, by the way.
The duration of this negotiations, reflects, the seriousness and potentially scale of the opportunity.
When you look at the big picture, what our acquisition has done to transform and improve the U.S. marketplace more than justifies and supports our return on our $2.5 billion.
We are targeting signing a definitive agreement in the first half of 2026.
Purchase price of stock.
Lourenço Gonçalves: In Q4, we revealed that our memorandum of understanding partner was POSCO, Korea's largest steelmaker and the world's third-largest steelmaker outside of China. The partnership with Cliffs will allow POSCO to support and grow its established US customer base while ensuring that its products meet US country-of-origin melted-import requirements. Our collaboration represents a model of how allies can deepen industrial cooperation under fair and transparent trade principles, and it aligns with US policy goals to strengthen domestic industry and attract foreign investment. POSCO continues to conduct due diligence as part of our recently announced strategic partnership. Both parties are focused on structuring a transaction that is highly accretive and strategically compelling for each company. The duration of these negotiations reflects the seriousness and potential scale of the opportunity. We are targeting signing a definitive agreement in the first half of 2026.
Lourenço Gonçalves: In Q4, we revealed that our memorandum of understanding partner was POSCO, Korea's largest steelmaker and the world's third-largest steelmaker outside of China. The partnership with Cliffs will allow POSCO to support and grow its established US customer base while ensuring that its products meet US country-of-origin melted-import requirements. Our collaboration represents a model of how allies can deepen industrial cooperation under fair and transparent trade principles, and it aligns with US policy goals to strengthen domestic industry and attract foreign investment. POSCO continues to conduct due diligence as part of our recently announced strategic partnership.
This Remains the number 1, strategic priority for both Cleveland Cliffs and postal.
And engagement between the teams is active and ongoing.
Our mou is non-binding.
Our Partnership. If the collaboration is a creative to Cliff's shareholders.
I would like to conclude my remarks congratulating our employees, for our remarkable safety record.
The partnership with Cliffs will allow PUSKU to support and grow its established US customer base while ensuring that its products meet US country of origin, melted, and poured requirements.
In 2025, we achieved the lowest total recordable incident rate since Cleveland Cliffs became, I still producer 6 years ago.
Our try including contractors?
With unusual in our industry. We include contractors.
Transparent Street principles align with U.S. policy goals to strengthen domestic industry and attract foreign investments.
Our try was 0.8 per 200,000 hours worked.
Lourenço Gonçalves: Both parties are focused on structuring a transaction that is highly accretive and strategically compelling for each company. The duration of these negotiations reflects the seriousness and potential scale of the opportunity. We are targeting signing a definitive agreement in the first half of 2026.
Postco continues to conduct due diligence as part of our recently announced strategic partnership.
That represents a 43% Improvement compared with 2021, which was our first full year operating as an integrated steel maker.
Both parties are focused on a structuring, a transaction. That's highly accretive and the strategically compelling for each company.
The duration of this negotiation reflects the seriousness and potential scale of the opportunity.
This is a direct outcome of how we manage and operate in contrast with how the predecessors used to do with the same people and the same plans.
Lourenço Gonçalves: This remains the number 1 strategic priority for both Cleveland-Cliffs and POSCO, and engagement between the teams is active and ongoing. Our MOU is non-binding, and we will only move forward on ratifying our partnership if the collaboration is accretive to Cliffs shareholders. I would like to conclude my remarks congratulating our employees for our remarkable safety record. In 2025, we achieved the lowest total recordable incident rate since Cleveland-Cliffs became a steel producer 6 years ago. Our TRIR, including contractors, which is unusual in our industry, we include contractors, our TRIR was 0.8 per 200,000 hours worked. That represents a 43% improvement compared with 2021, which was our first full year operating as an integrated steelmaker. This is a direct outcome of how we manage and operate in contrast with how the predecessors used to do, with the same people and the same plants.
Lourenço Gonçalves: This remains the number 1 strategic priority for both Cleveland-Cliffs and POSCO, and engagement between the teams is active and ongoing. Our MOU is non-binding, and we will only move forward on ratifying our partnership if the collaboration is accretive to Cliffs shareholders. I would like to conclude my remarks congratulating our employees for our remarkable safety record. In 2025, we achieved the lowest total recordable incident rate since Cleveland-Cliffs became a steel producer 6 years ago.
We are targeting signing a definitive agreement in the first half of 2026.
Safety performance at this level requires discipline, consistency and Leadership at every site.
This remains the number one strategic priority for both Cleveland-Cliffs and Postal.
And engagement between the teams is active and ongoing.
Our mou is non-binding.
We have room for improvement, but the amount of progress we have seen in safety results. Since forming this new iteration of cliffs, 6 years ago, is truly remarkable.
And we will only move forward on ratifying our Partnership. If the collaboration is a creative to Cliff's shareholders,
I will now turn it over to our CFO. It's also gonna solve this for his remarks.
Hey, good morning.
Total shipments in Q4 were 3.8 million tons, which was slightly lower than Q3 due to heavier than usual seasonal impacts.
Lourenço Gonçalves: Our TRIR, including contractors, which is unusual in our industry, we include contractors, our TRIR was 0.8 per 200,000 hours worked. That represents a 43% improvement compared with 2021, which was our first full year operating as an integrated steelmaker. This is a direct outcome of how we manage and operate in contrast with how the predecessors used to do, with the same people and the same plants.
I would like to conclude my remarks congratulating our employees for our remarkable safety record in 2025. We achieved the lowest total recordable incident rate since Cleveland-Cliffs became a steel producer 6 years ago.
Looking forward, q1 shipment levels, should improve back to the 4 million tonne level again driven by improved demand and less maintenance time at our Mills.
Our try including contractors?
What's unusual in our industry is that we include contractors.
Our TRR was 0.8 per 200,000 hours worked.
My expectation for full year, 2026 shipment level is in the 1 6. 5, 2 7.
That represents a 43% improvement compared with 2021, which was our first full year operating as an integrated steelmaker.
Q4 price, realization of 9993 per net, ton fell by around, $40 per net ton as the lagging indices on spot prices declined.
Automotive volume fell and slab prices became even more disconnected.
Lourenço Gonçalves: Safety performance at this level requires discipline, consistency, and leadership at every site. We have room for improvement, but the amount of progress we have seen in safety results since forming this new iteration of CLIFFS six years ago is truly remarkable. I will now turn it over to our CFO, Celso Goncalves, for his remarks. Hey, good morning. Total shipments in Q4 were 3.8 million tons, which was slightly lower than Q3 due to heavier-than-usual seasonal impacts. Looking forward, Q1 shipment levels should improve back to the 4 million ton level again, driven by improved demand and less maintenance time at our mills. My expectation for full-year 2026 shipment level is in the 16.5 to 17 million ton range, an improvement from 2025 as we run our mills at higher utilizations.
Lourenço Gonçalves: Safety performance at this level requires discipline, consistency, and leadership at every site. We have room for improvement, but the amount of progress we have seen in safety results since forming this new iteration of CLIFFS six years ago is truly remarkable. I will now turn it over to our CFO, Celso Goncalves, for his remarks.
This is a direct outcome of how we manage and operate, in contrast with how the predecessors used to do with the same people and the same plans.
Since these factors are largely behind us. I expect a substantial Improvement in realized prices starting in q1 of 2026, an increase of approximately $60 per ton, from Q4 of 2025.
Safety performance at this level requires discipline, consistency, and leadership at every site.
As pricing continues to grind higher and assuming this trend continues, we will likely see even further increases in this price as the year progresses.
We have room for improvement, but the amount of progress we have seen in safety results. Since forming this new iteration of cliffs, 6 years ago, is truly remarkable.
On the operation side.
Celso Goncalves: Hey, good morning. Total shipments in Q4 were 3.8 million tons, which was slightly lower than Q3 due to heavier-than-usual seasonal impacts. Looking forward, Q1 shipment levels should improve back to the 4 million ton level again, driven by improved demand and less maintenance time at our mills. My expectation for full-year 2026 shipment level is in the 16.5 to 17 million ton range, an improvement from 2025 as we run our mills at higher utilizations.
I will now turn it over to our CFO. It's also going to serve for his remarks.
Hey, good morning.
2025 represented our third straight year of unit cost reductions with another $40 per ton reduced last year.
The much-needed, rationalization of our footprint and reduction of around 3,300 employees. Last year was a big part of that.
Total shipments in Q4 were 3.8 million tons, which was slightly lower than Q3 due to heavier-than-usual seasonal impacts.
Looking forward, Q1 shipment levels should improve back to the 4 million tonne level again, driven by improved demand and less maintenance time at our mills.
We have further momentum heading into 2026, as we locked in cold contracts. That generate over $100 million of savings year-over-year and an expectation of much higher utilization, both in melt and in our finishing operations,
Lourenço Gonçalves: Q4 price realization of $993 per net ton fell by around $40 per net ton as the lagging indices on spot prices declined. Automotive volume fell, and slab prices became even more disconnected. Since these factors are largely behind us, I expect a substantial improvement in realized prices starting in Q1 of 2026, an increase of approximately $60 per ton from Q4 of 2025. As pricing continues to grind higher, and assuming this trend continues, we will likely see even further increases in this price as the year progresses. On the operations side, 2025 represented our third straight year of unit cost reductions, with another $40 per ton reduced last year. The much-needed rationalization of our footprint and reduction of around 3,300 employees last year was a big part of that.
Celso Goncalves: Q4 price realization of $993 per net ton fell by around $40 per net ton as the lagging indices on spot prices declined. Automotive volume fell, and slab prices became even more disconnected. Since these factors are largely behind us, I expect a substantial improvement in realized prices starting in Q1 of 2026, an increase of approximately $60 per ton from Q4 of 2025.
My expectation for full-year 2026 shipment level is in the 1,627 million ton range, an improvement from 2025 as we run our mills at higher utilizations.
Combining this with some partial offsets and utilities and labor costs. We expect unit costs to decline again for a fourth straight year down another $10 per ton in 2026.
Q4 price, realization of 9993 per net, ton fell by around, $40 per net ton as the lagging indices on spot prices declined.
On an Apples to Apples basis with 2025, the reduction is even greater. As we are also selling a richer mix this year without slabs, making the year-over-year reduction, even more impressive
Automotive volume fell and slab prices became even more disconnected.
with that said for the first quarter of 2026, the recent spike in utilities costs and change in mix will likely push costs up temporarily before normalizing into Q2
Celso Goncalves: As pricing continues to grind higher, and assuming this trend continues, we will likely see even further increases in this price as the year progresses. On the operations side, 2025 represented our third straight year of unit cost reductions, with another $40 per ton reduced last year. The much-needed rationalization of our footprint and reduction of around 3,300 employees last year was a big part of that.
As a reminder, we generally hedge 50% of our natural gas exposure to looking forward 1 year.
As pricing continues to grind higher, and assuming this trend continues, we will likely see even further increases in this price as the year progresses.
On the operation side.
on capex, we had a record low year in 2025 in capital expenditures as a steel company with only 561 million spent,
2025 represented our third straight year of unit cost reductions, with another $40 per ton reduced last year.
Lourenço Gonçalves: We have further momentum heading into 2026 as we locked in coal contracts that generate over $100 million of savings year-over-year and an expectation of much higher utilizations, both in melt and in our finishing operations. Combining this with some partial offsets in utilities and labor costs, we expect unit costs to decline again for a fourth straight year, down another $10 per ton in 2026. On an apples-to-apples basis with 2025, the reduction is even greater as we are also selling a richer mix this year without slabs, making the year-over-year reduction even more impressive. With that said, for Q1 2026, the recent spike in utilities costs and change in mix will likely push costs up temporarily before normalizing into Q2. As a reminder, we generally hedge 50% of our natural gas exposure looking forward one year.
Celso Goncalves: We have further momentum heading into 2026 as we locked in coal contracts that generate over $100 million of savings year-over-year and an expectation of much higher utilizations, both in melt and in our finishing operations. Combining this with some partial offsets in utilities and labor costs, we expect unit costs to decline again for a fourth straight year, down another $10 per ton in 2026.
2026. Total capex is projected to be around, 700 million, reflecting more normalized maintenance Capital, as well as some pre-work and a coke. Plant upgrade ahead of the Burns Harbor, furnace sea, realign plan for 2027.
The much-needed rationalization of our footprint and reduction of around 3,300 employees—last year was a big part of that.
Annual pension and oped, cash obligations continue to decline.
Pay down debt.
We have further momentum heading into 2026 as we locked in coal contracts that generate over $100 million of savings year-over-year, and an expectation of much higher utilization, both in melt and in our finishing operations.
Asset sale processes continue and they should bring us more cash proceeds throughout the year.
Celso Goncalves: On an apples-to-apples basis with 2025, the reduction is even greater as we are also selling a richer mix this year without slabs, making the year-over-year reduction even more impressive. With that said, for Q1 2026, the recent spike in utilities costs and change in mix will likely push costs up temporarily before normalizing into Q2. As a reminder, we generally hedge 50% of our natural gas exposure looking forward one year.
Combining this with some partial offsets in utilities and labor costs, we expect unit costs to decline again for a fourth straight year, down another $10 per ton in 2026.
We have already closed the sale of fpt, Florida, and we are under contract to sell several, idled properties with agreements and principal for the majority of the rest.
My expectation of the 425 million in total proceeds from these sales remains intact.
Impressive.
Some of the larger asset sale processes remain in a holding pattern while the Pasco talks remain ongoing. But we have several options out there that we are evaluating
with that said for the first quarter of 2026, the recent spike in utilities costs and change in mix will likely push costs up temporarily before normalizing into Q2
1, major success. We had in 2025 was balance sheet management particularly in the fourth quarter.
As a reminder, we generally hedge 50% of our natural gas exposure looking forward one year.
Lourenço Gonçalves: On CapEx, we had a record low year in 2025 in capital expenditures as a steel company, with only $561 million spent. 2026 total CapEx is projected to be around $700 million, reflecting more normalized maintenance capital as well as some pre-work and a Coke plant upgrade ahead of the Burns Harbor Furnace C Reline plan for 2027. Annual pension and OPEB cash obligations continue to decline. With the HRC curve where it is and automotive volumes ultimately returning, I expect to return back to healthy cash flow generation in 2026, all of which will be used to pay down debt. Asset sale processes continue, and they should bring us more cash proceeds throughout the year. We have already closed the sale of FPT Florida, and we are under contract to sell several idled properties, with agreements in principle for the majority of the rest.
Celso Goncalves: On CapEx, we had a record low year in 2025 in capital expenditures as a steel company, with only $561 million spent. 2026 total CapEx is projected to be around $700 million, reflecting more normalized maintenance capital as well as some pre-work and a Coke plant upgrade ahead of the Burns Harbor Furnace C Reline plan for 2027. Annual pension and OPEB cash obligations continue to decline.
from a pure dollar perspective, our leverage remains 2 elevated for my liking but the shape And format of our debt structure gives us incredible Runway and flexibility
On CapEx, we had a record low year in 2025 in capital expenditures as a steel company, with only $561 million spent.
After the refinancing that we completed in 2025, our nearest Bond maturity is now in 2029 and all of our outstanding bonds are unsecured.
Our abl draw is the lowest. It has been since the stelco acquisition and our total liquidity to end 2025 was 3.3 billion.
2026 total capex is projected to be around $700 million, reflecting more normalized maintenance capital, as well as some pre-work and a coke plant upgrade ahead of the Burns Harbor front of C reine plan for 2027.
Celso Goncalves: With the HRC curve where it is and automotive volumes ultimately returning, I expect to return back to healthy cash flow generation in 2026, all of which will be used to pay down debt. Asset sale processes continue, and they should bring us more cash proceeds throughout the year. We have already closed the sale of FPT Florida, and we are under contract to sell several idled properties, with agreements in principle for the majority of the rest.
Annual pension and OPEB cash obligations continue to decline.
The focus this year is on generating ibida and cash flow.
I feel much better about where we are today versus where we were 12 months ago.
Looking ahead. Our order book is solid.
With the HRC curve where it is and automotive volumes ultimately returning, I expect to return back to healthy cash flow generation in 2026, all of which will be used to pay down debt.
Demand is improving.
Lead times are going out.
Asset sale processes continue.
Prices are rising.
Costs are still coming down.
And they should bring us more cash proceeds throughout the year.
Tariffs are in place.
The slab contract is gone.
Manufacturing is coming back.
On employment is low.
Lourenço Gonçalves: My expectation of the $425 million in total proceeds from these sales remains intact. Some of the larger asset sale processes remain in a holding pattern while the POSCO talks remain ongoing, but we have several options out there that we are evaluating. One major success we had in 2025 was balance sheet management, particularly in Q4. From a pure dollar perspective, our leverage remains too elevated for my liking, but the shape and format of our debt structure gives us incredible runway and flexibility. After the refinancings that we completed in 2025, our nearest bond maturity is now in 2029, and all of our outstanding bonds are unsecured. Our ABL draw is the lowest it has been since the STELCO acquisition, and our total liquidity to end 2025 was $3.3 billion. The focus this year is on generating EBITDA and cash flow.
Celso Goncalves: My expectation of the $425 million in total proceeds from these sales remains intact. Some of the larger asset sale processes remain in a holding pattern while the POSCO talks remain ongoing, but we have several options out there that we are evaluating. One major success we had in 2025 was balance sheet management, particularly in Q4. From a pure dollar perspective, our leverage remains too elevated for my liking, but the shape and format of our debt structure gives us incredible runway and flexibility.
We have already closed the sale of FPT, Florida, and we are under contract to sell several idled properties, with agreements and principal for the majority of the rest.
Rate cuts are here.
Tax refunds are coming.
Stellos contributing.
My expectation of the $425 million in total proceeds from these sales remains intact.
Autos are looking to replace aluminum with steel.
Pasco is collaborating.
Our employees are incentivized.
Some of the larger asset sale processes remain in a holding pattern while the Pasco talks remain ongoing. But we have several options out there that we are evaluating.
And our operations and Commercial teams are working together towards the same goal to maximize profitability in 2026.
One major success we had in 2025 was balance sheet management, particularly in the fourth quarter.
With that, I'll turn the call back over to Lorenzo for his closing remarks.
Celso Goncalves: After the refinancings that we completed in 2025, our nearest bond maturity is now in 2029, and all of our outstanding bonds are unsecured. Our ABL draw is the lowest it has been since the STELCO acquisition, and our total liquidity to end 2025 was $3.3 billion. The focus this year is on generating EBITDA and cash flow.
From a pure dollar perspective, our leverage remains too elevated for my liking, but the shape and format of our debt structure gives us incredible runway and flexibility.
Thank yourself for 2025, who has about fixing? What needed to be fixed making tough. But necessary, decisions and positioning Global and cliffs for sustainable performance in a fundamentally improved Market.
After the refinancing that we completed in 2025, our nearest bond maturity is now in 2029, and all of our outstanding bonds are unsecured.
Those actions are now largely behind us.
Our abl draw is the lowest. It has been since the stelco acquisition and our total liquidity to end 2025 was 3.3 billion.
Lourenço Gonçalves: I feel much better about where we are today versus where we were 12 months ago. Looking ahead, our order book is solid, demand is improving, lead times are going out, prices are rising, costs are still coming down, tariffs are in place, the slab contract is gone, manufacturing is coming back, unemployment is low, rate cuts are here, tax refunds are coming, Stelco is contributing, autos are looking to replace aluminum with steel, POSCO is collaborating, our employees are incentivized, and our operations and commercial teams are working together towards the same goal to maximize profitability in 2026. With that, I'll turn the call back over to Lourenco for his closing remarks. Thank you, Celso. 2025 was about fixing what needed to be fixed, making tough but necessary decisions, and positioning Cleveland-Cliffs for sustainable performance in a fundamentally improved market. Those actions are now largely behind us.
Celso Goncalves: I feel much better about where we are today versus where we were 12 months ago. Looking ahead, our order book is solid, demand is improving, lead times are going out, prices are rising, costs are still coming down, tariffs are in place, the slab contract is gone, manufacturing is coming back, unemployment is low, rate cuts are here, tax refunds are coming, Stelco is contributing, autos are looking to replace aluminum with steel, POSCO is collaborating, our employees are incentivized, and our operations and commercial teams are working together towards the same goal to maximize profitability in 2026. With that, I'll turn the call back over to Lourenco for his closing remarks.
The focus this year is on generating EBITDA and cash flow.
As we move through 2026, we are operating with a liner footprint, a stronger order book, improving price. Realization declining unit costs. And a clear line of sight to higher utilization and cash generation.
I feel much better about where we are today versus where we were 12 months ago.
With that, I'll turn it over to Kevin for the Q&A.
Looking ahead, our order book is solid.
Demand is improving.
Lead times are going out.
Prices are rising.
Costs are still coming down.
Thank you. And I'll be conducting a question and answer session. If you'd like, to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Tariffs are in place.
The slab contract is gone.
You may press star 2. If you'd like to book a question from the queue,
Manufacturing is coming back.
Unemployment is low.
Rate cuts are here.
Tax refunds are coming.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1 1 moment, please while we pull up for questions.
Stellos contributing.
Autos are looking to replace aluminum with steel.
Our first question today is coming from Carlos Dhaba. From Morgan Stanley, your line is now live
Pasco is collaborating.
Our employees are incentivized.
And our Operations and Commercial teams are working together towards the same goal, to maximize profitability in 2026.
Lourenço Gonçalves: Thank you, Celso. 2025 was about fixing what needed to be fixed, making tough but necessary decisions, and positioning Cleveland-Cliffs for sustainable performance in a fundamentally improved market. Those actions are now largely behind us.
With that, I'll turn the call back over to Lorenzo for his closing remarks.
Thank you. Essay, 2025 was about fixing what needed to be fixed making tough. But necessary, decisions and positioning Global and cliffs for sustainable performance in a fundamentally improved Market.
Yeah, good morning, Lorenzo, thank you. Um, my first question is on, on the benefit that you expect on the cancellation of the slab contract this year, uh, you're given the running prices that we have seen. Can you maybe update us as to how much ebida more or less or any other, you know, form of, uh, of, uh, benefit that you expect to see from from, uh, that, you know, this this contract expiring and then, uh, maybe we can, uh, just on, on, capex, Beyond 2026. Um, you're given the reigning that that you expect on 2027
Lourenço Gonçalves: As we move through 2026, we are operating with a leaner footprint, a stronger order book, improving price realization, declining unit costs, and a clear line of sight to higher utilization and cash generation. With that, I'll turn it over to Kevin for the Q&A. Thank you. We're now conducting a question-and-answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please, while we pull up your questions. Our first question today is coming from Carlos De Alba from Morgan Stanley. Your line is now live. Yeah, good morning, Lourenco and Celso. Thank you.
Lourenço Gonçalves: As we move through 2026, we are operating with a leaner footprint, a stronger order book, improving price realization, declining unit costs, and a clear line of sight to higher utilization and cash generation. With that, I'll turn it over to Kevin for the Q&A.
Those actions are now largely behind us.
You know how much we pencil in, um, give or take for for capex in 2027.
Yeah, good morning callus. Uh, I will uh, answer. Uh, the the, the the question that is labs and I will let also talk about the capex 1.
As we move through 2026, we are operating with a linear footprint—a stronger order book, improving price realization, declining unit costs, and a clear line of sight to higher utilization and cash generation.
Operator: Thank you. We're now conducting a question-and-answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please, while we pull up your questions. Our first question today is coming from Carlos De Alba from Morgan Stanley. Your line is now live. Yeah, good morning, Lourenco and Celso. Thank you.
uh, as far as these Labs, uh,
With that, I'll turn it over to Kevin for the Q&A.
we when we sold, I'm sorry when we acquired uh arsalan middle USA from Arlo middle, uh, we
Thank you. Will now be conducting a question and answer session. If you'd like, to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You may press star 2. If you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1 1 moment, please while we pull up for questions.
Our first question today is coming from Carlos Dhaba. From Morgan Stanley, your line is now live
Lourenço Gonçalves: My first question is on the benefit that you expect on the cancellation of the slab contract this year. Given the running prices that we have seen, can you maybe update us as to how much EBITDA, more or less, or any other form of benefit that you expect to see from this contract expiring? And then maybe we can just on CapEx beyond 2026, given the relining that you expect on 2027, how much should we pencil in, give or take, for CapEx in 2027? Yeah, good morning, Carlos. I will answer the question on the slabs, and I will let Celso talk about the CapEx one. As far as the slabs, when we sold I'm sorry, when we acquired ArcelorMittal USA from ArcelorMittal, we had that slab contract as the last item that we had to negotiate.
Carlos De Alba: My first question is on the benefit that you expect on the cancellation of the slab contract this year. Given the running prices that we have seen, can you maybe update us as to how much EBITDA, more or less, or any other form of benefit that you expect to see from this contract expiring? And then maybe we can just on CapEx beyond 2026, given the relining that you expect on 2027, how much should we pencil in, give or take, for CapEx in 2027?
So, and for, for 4 of the 5 years, the contract to work it. And then on the fifth year, uh, magically the separation between the price of slabs and the price of, uh, of hot wind, uh, turned that contractor into a disaster.
Lourenço Gonçalves: Yeah, good morning, Carlos. I will answer the question on the slabs, and I will let Celso talk about the CapEx one. As far as the slabs, when we sold I'm sorry, when we acquired ArcelorMittal USA from ArcelorMittal, we had that slab contract as the last item that we had to negotiate.
Um, you're given the reigning that you expect on 2027. How much should we pencil in, um, give or take for capex in 2027?
Yeah. Good morning, Carlos. Uh, I will, uh, answer, uh, the, the, the question that is labs, and I will let also talk about the CapEx one.
Uh, as far as these labs, uh,
Lourenço Gonçalves: And it was more about duration than pricing formula because pricing formula was based on the international price of slabs and referencing the Brazilian slab price just because Brazil was by far the largest exporter of slabs at the time. And for four of the five years, the contract worked it. And then on the fifth year, magically, the separation between the price of slabs and the price of hot band turned that contract into a disaster. And we tried to negotiate the contract, but we were unsuccessful because short-term gains for them were more important than the long-term relationship. So I'm fine with that. So I ate. I took like a big boy. And now they don't have our slabs anymore. So good luck on running their business here in the United States without having melted and pouring slabs made in Cleveland-Cliffs, not made in somewhere else.
Lourenço Gonçalves: And it was more about duration than pricing formula because pricing formula was based on the international price of slabs and referencing the Brazilian slab price just because Brazil was by far the largest exporter of slabs at the time. And for four of the five years, the contract worked it. And then on the fifth year, magically, the separation between the price of slabs and the price of hot band turned that contract into a disaster.
And, uh, we tried to negotiate the, the, the contract, but, uh, we were unsuccessful, uh, because short-term gains for them were more important than, than the long-term relationship. So, I, I'm fine with that. So I ate, I took like a like a, a big boy and, uh, now, uh, they don't have 2 hours left anymore. So good luck on running their business here in the United States without having melted and poured. His Labs made in Cleveland Cliffs. Not made in somewhere else somewhere else. Does not know what they're doing. We know what we are doing. So, uh, so they don't have these Labs anymore. And if I can put that number on the, on the, on the, the, the the gain, uh, the the the, the, the, the number by itself is to the order of 500 million dollars just by replacing these Labs with higher margin. That's, that's a very uh, high level number and uh should be uh even
More than that. But uh, 500 million dollars is a good number to, to start, uh, thinking about the gain of not having and that's just the benefit on us. Not the fact that uh competition for automotive business became automatically weaker when you don't make ourselves available to a competitor.
Lourenço Gonçalves: And we tried to negotiate the contract, but we were unsuccessful because short-term gains for them were more important than the long-term relationship. So I'm fine with that. So I ate. I took like a big boy. And now they don't have our slabs anymore. So good luck on running their business here in the United States without having melted and pouring slabs made in Cleveland-Cliffs, not made in somewhere else.
when when we sold, I'm sorry when we acquired, uh, arsalan, middle USA from arcelo Mirror. Uh, we had that this lab, uh, contract as the last item that we had to negotiate, and it was more about duration, then then then then pricing formula, because pricing formula was based on the international price of labs and referencing the Brazilian. This land price just because Brazil was the by far, the largest exporter of slabs at the time. So and for for 4, 4 of the 5 years, the contract to work it, and then on the 5th year, uh, magically the separation between the price of slabs and the price of of hot men, turned that contract into a disaster.
I I'll let also answer the other 1 on capex and so sorry, may maybe maybe, maybe maybe before we move to to sell. So, um, um, please quick question and so on, on when when should we expect to see, um, the the beginning of this around 500 million Improvement in India already in q1, or is more Q2?
Lourenço Gonçalves: Somewhere else does not know what they're doing. We know what we are doing. So they don't have those slabs anymore. And if I can put a number on the gain, EBITDA number by itself is to the order of $500 million just by replacing the slabs with higher margin. That's a very high-level number and should be even more than that. But $500 million is a good number to start thinking about the gain of not having. And that's just the benefit on us, not the fact that competition for automotive business became automatically weaker when you don't make our slabs available to a competitor. I'll let Celso answer the other one on CapEx. And sorry, maybe before we move to Celso. Please. Quick question, Lourenco. When should we expect to see the beginning of this around $500 million improvement in EBITDA? Already in Q1 or is more Q2?
Lourenço Gonçalves: Somewhere else does not know what they're doing. We know what we are doing. So they don't have those slabs anymore. And if I can put a number on the gain, EBITDA number by itself is to the order of $500 million just by replacing the slabs with higher margin. That's a very high-level number and should be even more than that. But $500 million is a good number to start thinking about the gain of not having. And that's just the benefit on us, not the fact that competition for automotive business became automatically weaker when you don't make our slabs available to a competitor. I'll let Celso answer the other one on CapEx.
Yeah. Look, we are already selling the, the material in q1. Yes. So, uh, but of course, you know how these things work. The the, the the, the, the the cost, uh, flows through inventory. And, uh, you're going to see more impact in Q2 than in q1 and then more impacting Q3 than in Q2. But that's our projection for the, for the
Year. Yeah, Carlos if you think about it, right? The
HRC price is 970 or so and and the slab price was like 4.85. So it's a, it's a pretty immediate Improvement. Um,
you know, in terms of Revenue at at the current price, uh, it's like a 700 million in Revenue at current market prices and then you consider,
And, uh, we tried to negotiate the, the, the contract, but, uh, we were unsuccessful, uh, because short-term gains for them were more important than, than the long-term relationship. So, I'm fine with that. So I ate, I took like a like a, a big boy and, uh, now, uh, they don't have 2 hours left anymore. So good luck on running their business here in the United States, without having melted in, for his Labs made in Cleveland Cliffs. Not made in somewhere else somewhere else. Does not know what they're doing. We know what we are doing. So, uh, so they don't have these Labs anymore. And if I can put a number on the, on the, on the, the, the the gain, uh, the the the the, the the, the number by itself is to the order of 500 million dollars just by replacing these Labs with higher margin. That's, that's a very uh high level number and uh should be uh even
Call it 150 million increasing conversion costs to roll the slabs. That's that's the way to think about it on a full year basis for 2026.
Right. Thank you.
Yeah.
More than that. But $500 million is a good number to start thinking about the gain of not having, and that's just the benefit on us. Not the fact that, uh, competition for automotive business became automatically weaker when you don't make CAR Labs available to a competitor.
Carlos De Alba: And sorry, maybe before we move to Celso. Please. Quick question, Lourenco. When should we expect to see the beginning of this around $500 million improvement in EBITDA? Already in Q1 or is more Q2?
And then, as it relates to capex, um, you know, as I mentioned 2025 was was a record low at 565. Um, we had dramatically reduced spend at stelco, we had capex of white and related to idle facilities and asset optimization and things things like that. Um,
Uh, I’ll let Social answer the other one on capex, and so sorry, maybe, maybe—maybe, maybe before we move to South. So, um, um, please, quick question, and so,
when, when should we
Lourenço Gonçalves: Yeah, look, we are already selling the material in Q1, yes. But of course, you know how these things work. The cost flows through inventory, and you're going to see more impact in Q2 than in Q1 and then more impact in Q3 than in Q2. But that's our projection for the year. Yeah, Carlos, if you think about it, right, the HRC price is $970 or so, and the slab price was like $485. So it's a pretty immediate improvement in terms of revenue at the current price. It's like a $700 million improvement in revenue at current market prices. And then you consider, call it, $150 million increase in conversion costs to roll the slabs. That's the way to think about it on a full-year basis for 2026. Right. Thank you. Yeah.
Lourenço Gonçalves: Yeah, look, we are already selling the material in Q1, yes. But of course, you know how these things work. The cost flows through inventory, and you're going to see more impact in Q2 than in Q1 and then more impact in Q3 than in Q2. But that's our projection for the year.
Did the beginning of this, around $500 million improvement in India, already happen in Q1, or is it more in Q2?
2026 will be more normalized at 700 million. Um, call it more normalized maintenance spend, and some pre-work, um, and press, spend related to the Burns Harbor aree line in 2027.
And then beyond 27. Um you know it goes to call it 900 uh in 27. And then back down uh to 700 uh in 2028. And the only reason that 27 goes to 900 is is largely because of that Blast Furnace, uh,
Re line at Burns Harbor.
Celso Goncalves: Yeah, Carlos, if you think about it, right, the HRC price is $970 or so, and the slab price was like $485. So it's a pretty immediate improvement in terms of revenue at the current price. It's like a $700 million improvement in revenue at current market prices. And then you consider, call it, $150 million increase in conversion costs to roll the slabs. That's the way to think about it on a full-year basis for 2026.
Perfect, thank you very much.
Yeah. Look, we are already selling the, the material in q1. Yes. So uh, but of course, you know how these things work. The the, the the the cost, uh, flows through inventory, and, uh, you're going to see more impacting Q2 than in q1 and then more impacting Q3 than in Q2. But that's our projection for the, for the
Thank you.
Thank you. Next question, is coming from Nick Charles from B, Riley security. July is now live.
Yeah, Carlos, if you think about it, right, the HRC price is $970 or so, and the slab price was like $485, so it's a pretty immediate improvement. Um,
You know, in terms of revenue at the current price, it's like a $700 million improvement in revenue at current market prices, and then you consider—
Carlos De Alba: Right. Thank you. Yeah.
Call it $150 million in increasing conversion costs to roll the slabs. That's the way to think about it on a four-year basis for 2026.
Great. Thank you.
Lourenço Gonçalves: And then as it relates to CapEx, as I mentioned, 2025 was a record low at $565. We had dramatically reduced spend at Stelco. We had CapEx avoidance related to idled facilities, asset optimization, and things like that. 2026 will be more normalized. That's $700 million. Call it more normalized maintenance spend and some pre-work and pre-spend related to the Burns Harbor reline in 2027. And then beyond 2027, it goes to, call it, $900 in 2027 and then back down to $700 in 2028. And the only reason that 2027 goes to $900 is largely because of that blast furnace reline at Burns Harbor. Perfect. Thank you very much. Thank you. Thank you. Next question is coming from Nick Giles from B. Riley Securities. Your line is now live. Thank you, operator. Good morning, Lourenco and Celso.
Lourenço Gonçalves: And then as it relates to CapEx, as I mentioned, 2025 was a record low at $565. We had dramatically reduced spend at Stelco. We had CapEx avoidance related to idled facilities, asset optimization, and things like that. 2026 will be more normalized. That's $700 million. Call it more normalized maintenance spend and some pre-work and pre-spend related to the Burns Harbor reline in 2027. And then beyond 2027, it goes to, call it, $900 in 2027 and then back down to $700 in 2028. And the only reason that 2027 goes to $900 is largely because of that blast furnace reline at Burns Harbor.
The operator, uh, good morning, Linda and so, so, uh, Lorenzo, you outlined the capacity you have today and, uh, attractive incremental, margins on what I heard is uncontracted volume. So now you've layered in some, some multi-year agreements, but I was wondering if you could give us a sense for how much open capacity that is, uh, what could still be contracted in, uh, similar to Carlos's questions. Just any sensitivity, uh, from an EA perspective,
Yeah. Look, uh, we we have Downstream capacity uh, in in in pretty much every single location that we operate. Just to give you an idea, let me take a simple example.
Yeah. And then, as it relates to CapEx, um, you know, as I mentioned, 2025 was a record low at $565 million. Um, we had dramatically reduced spend at Stelco, we had CapEx avoidance related to idle facilities and asset optimization and things like that. Um,
2026 will be more normalized at $700 million. Um, call it more normalized maintenance spend, and some pre-work, uh, and pre-spend related to the Burns Harbor ARL line in 2027.
Best of 450,000, tons a year, we can produce all kinds of exposed Parts over there.
And then beyond 27. Um you know it goes to call it 900 uh in 27. And then back down uh to 700 uh in 2028. And the only reason that 27 goes to 900 is is largely because of that Blast Furnace, uh,
Carlos De Alba: Perfect. Thank you very much.
3 line at Burns Harbor.
Celso Goncalves: Thank you.
Operator: Thank you. Next question is coming from Nick Giles from B. Riley Securities. Your line is now live. Thank you, operator. Good morning, Lourenco and Celso.
Perfect, thank you very much.
Thank you.
Thank you. Next question is coming from Nick Charles from B. Riley Securities. July is now live.
Lourenço Gonçalves: Lourenco, you outlined the capacity you have today and attractive incremental margins on what I heard is uncontracted volume. So you've layered in some multi-year agreements, but I was wondering if you could give us a sense for how much open capacity that is, what could still be contracted, and similar to Carlos' questions, just any sensitivity from an EBITDA perspective. Yeah, look, we have downstream capacity in pretty much every single location that we operate. Just to give you an idea, let me take a simple example. Single line, galvanizing line we have in Columbus, Ohio. That was one of the first assets that were caught in the attention for POSCO. We run that line at less than 300,000 tons a year. That line has a capacity of 450,000 tons a year. We can produce all kinds of exposed parts over there.
Nick Giles: Lourenco, you outlined the capacity you have today and attractive incremental margins on what I heard is uncontracted volume. So you've layered in some multi-year agreements, but I was wondering if you could give us a sense for how much open capacity that is, what could still be contracted, and similar to Carlos' questions, just any sensitivity from an EBITDA perspective.
But uh we don't run at full capacity because uh the oems don't produce cars in the United States, as much as they should, they produce in Mexico. They import from Korea, the import from other places and that's what kind of cues our Automotive business. And it has been abundantly clear since day 1 of the the Trump Administration. The the the directive is to produce cars in the United States, not in Port importing, cars from Korea and putting a stamp of an American OEM on top of that is still Korean. Car is not an American car. It's not a generate American jobs.
Lourenço Gonçalves: Yeah, look, we have downstream capacity in pretty much every single location that we operate. Just to give you an idea, let me take a simple example. Single line, galvanizing line we have in Columbus, Ohio. That was one of the first assets that were caught in the attention for POSCO. We run that line at less than 300,000 tons a year. That line has a capacity of 450,000 tons a year. We can produce all kinds of exposed parts over there.
Also, um, on Learns, are you outlining the capacity you have today, and, uh, attractive incremental margins on what I heard is uncontracted volume? So, you know, you've layered in some multi-year agreements, but I was wondering if you could give us a sense for how much open capacity that is—uh, what could still be contracted in? Similar to Carlos' question, just any sensitivity from an EVO perspective.
Yeah, look, uh, we, we have downstream capacity, uh, in, in pretty much every single location that we operate. Just to give you an idea, let me take a simple example.
So, uh, that's what cues are our capacity utilization. Uh, we, uh, need this made in the USA out of world production in order to utilize our capacity. What I just explained to with numbers, uh, for Columbus Ohio, I can do the same thing for Rockport, um, in Indiana. Uh,
For, for other Downstream facilities, like, uh, what we call, uh, new car live in Indiana. That used to call be called Tech, and quote, uh, under the previous, uh, ownership. Uh, we we have a lot of capacity to, to, to deploy and it's a matter of just
Lourenço Gonçalves: But we don't run at full capacity because the OEMs don't produce cars in the United States as much as they should. They produce in Mexico. They import from Korea. They import from other places. And that's what kind of kills our automotive business. And it has been abundantly clear since day one of the Trump administration. The directive is to produce cars in the United States, not importing cars from Korea and putting a stamp of an American OEM on top of that. It's still a Korean car. It's not an American car. It's not generating American jobs. So that's what kills our capacity utilization. We need this made-in-USA automotive production in order to utilize our capacity.
Lourenço Gonçalves: But we don't run at full capacity because the OEMs don't produce cars in the United States as much as they should. They produce in Mexico. They import from Korea. They import from other places. And that's what kind of kills our automotive business. And it has been abundantly clear since day one of the Trump administration. The directive is to produce cars in the United States, not importing cars from Korea and putting a stamp of an American OEM on top of that. It's still a Korean car. It's not an American car. It's not generating American jobs. So that's what kills our capacity utilization. We need this made-in-USA automotive production in order to utilize our capacity.
Single line governing line, we have in Colombus uh Ohio. Uh, there was 1 of the first uh assets that were uh cut in the we're cutting the attention for PCO. Um, we we run that line, uh, at less than 300,000 loans. A year that that line has a capacity of 450,000, tons a year, we can produce all kinds of exposed parts of it there.
Movie from commodity type, which by the way, now is extremely profitable, uh, to a more specialized, uh, uh, uh, type of Steel that we it's typical Cleveland Cliffs. Uh,
But uh we don't run at full capacity because uh the oems don't produce cars in the United States, as much as they should, they produce in Mexico. They import from Korea, the import from other places and that's what kind of cues our Automotive business. And it has been abundantly clear since day 1 of the
The Trump Administration the the the directive is to produce cars in the United States, not in Port importing, cars from Korea and putting a stamp of a an American OEM on top of that is still a Korean. Car is not an American car. Is not a generate American jobs.
Type of capability or forte in terms of the technology. By the way, we have the technology, we are well known and well, recognized supplier of Automotive is still in the international scale and uh we knew that all along. Now we have a the agreement of pus on that. So there's nothing that we need to learn from post code, uh, to how to do stuff. We know how to do stuff. We just don't have the orders but now we're going to have it.
I I I really appreciate all that detail. My second question was
Lourenço Gonçalves: What I just explained with numbers for Columbus, Ohio, I can do the same thing for Rockport, Indiana, for other downstream facilities like what we call New Carlisle, Indiana, that used to be called Tech & Coat under previous ownership. We have a lot of capacity to deploy. And it's a matter of just moving from commodity type which, by the way, now is extremely profitable to a more specialized type of steel that it's typical Cleveland-Cliffs type of capability or forte in terms of the technology. By the way, we have the technology. We are a well-known and well-recognized supplier of automotive steel in the international scale. And we knew that all along. Now we have the agreement of POSCO on that. So there's nothing that we need to learn from POSCO to how to do stuff. We know how to do stuff. We just don't have the orders.
Lourenço Gonçalves: What I just explained with numbers for Columbus, Ohio, I can do the same thing for Rockport, Indiana, for other downstream facilities like what we call New Carlisle, Indiana, that used to be called Tech & Coat under previous ownership. We have a lot of capacity to deploy. And it's a matter of just moving from commodity type which, by the way, now is extremely profitable to a more specialized type of steel that it's typical Cleveland-Cliffs type of capability or forte in terms of the technology. By the way, we have the technology. We are a well-known and well-recognized supplier of automotive steel in the international scale. And we knew that all along. Now we have the agreement of POSCO on that. So there's nothing that we need to learn from POSCO to how to do stuff. We know how to do stuff. We just don't have the orders. But now we're going to have it.
So, uh, that's what cues our capacity utilization. Uh, we, uh, need this Made in USA automotive production in order to utilize our capacity. What I just explained to you with numbers, uh, for Col Ohio, I can do the same thing for Rockport,
um, Indiana, uh,
Really, just around the Outlook particularly here in 1 Q. HRC has obviously been dramatically. So can you just uh, help us set? Expectations around uh, ASP and costs. And um, maybe just find as well. Thanks. Yeah, I'll have to also handle that to for you, Nick. Yeah. Hey, Nick, let me give you guys some general. Uh,
Uh, guidance and uh for q1 and the rest of 2026. So for q1 shipment should return back to that 4 million ton Mark, um, and that's lar. Largely driven by improved demand both in the US and Canada. Um, q1 auto shipments are expected to improve back to the call at Q3 of 25 levels or better.
For, for other Downstream facilities, like uh, what we call new car live in Indiana, that used to call be called Tech, and quote, uh, under the previous ownership, uh, we we have a lot of capacity to, to, to deploy and it's a matter of just moving from commodity type with, by the way. Now it's extremely profitable, uh, to a more specialized, uh, uh, uh, type of Steel that we, it's typical Cleveland Cliffs. Uh,
Um as I mentioned, ASP is expected to be up. $60 a tonne uh in q1 all that price that negative negatively impacted Q4 is now positive for for q1. The monthly lag, the quarter lags and the spot pricing are all up. Canadian pricing is also improving. Um, you know, we talked about the end of this slab contract and and the automotive volumes in uh, increasing is also a benefit.
Lourenço Gonçalves: But now we're going to have it. I really appreciate all that detail. My second question was really just around the outlook, particularly here in Q1. HRC has obviously risen dramatically. So can you just help us set expectations around ASP and costs and maybe just volumes as well? Thanks. Yeah, I'll have Celso handle that for you, Nick. Yeah, hey, Nick. Let me give you guys some general guidance for Q1 and the rest of 2026. So for Q1, shipments should return back to that 4 million ton mark. And that's largely driven by improved demand both in the US and Canada. Q1 auto shipments are expected to improve back to the, call it, Q3 of 2025 levels or better. As I mentioned, ASP is expected to be up $60 a ton in Q1. All that pricing that negatively impacted Q4 is now positive for Q1.
Nick Giles: I really appreciate all that detail. My second question was really just around the outlook, particularly here in Q1. HRC has obviously risen dramatically. So can you just help us set expectations around ASP and costs and maybe just volumes as well? Thanks.
Type of capability or forte in terms of the technology. By the way, we have the technology, we are a well-known and well-recognized supplier of automotive still on the international scale, and, uh, we knew that all along. Now we have the agreement to put us on that. So there's nothing that we need to learn from Post Code, uh, to how to do stuff. We know how to do stuff. We just don't have the orders, but now we're going to have it.
Um, the way that we calculate a ASP has changed slightly. So let me give you guys the new kind of guidelines for that given the ex expiration of the slab contract and the increased Automotive volume.
I I I really appreciate all that detail. My second question was
Uh the way to think about it, going forward is around 35 to 40% uh is on a fixed full year price with resets throughout the year, obviously. And then 25% of the volumes are on a CU month, lag.
10% is on a CU quarter lag.
Lourenço Gonçalves: Yeah, I'll have Celso handle that for you, Nick.
Celso Goncalves: Yeah, hey, Nick. Let me give you guys some general guidance for Q1 and the rest of 2026. So for Q1, shipments should return back to that 4 million ton mark. And that's largely driven by improved demand both in the US and Canada. Q1 auto shipments are expected to improve back to the, call it, Q3 of 2025 levels or better. As I mentioned, ASP is expected to be up $60 a ton in Q1. All that pricing that negatively impacted Q4 is now positive for Q1.
And then the the balance call at 25 to 30% is the spot. Uh, and other including the stelco volume. So that's the way to
Really, just around the Outlook particularly here in 1 Q. HRC has obviously been dramatically. So can you just uh, help us set? Expectations around uh, ASP and costs and um, maybe just following as well. Thanks. Yeah, I'll have us also handle that for you, Nick. Yeah. Hey Nick, let me give you guys some general. Uh,
to think about ASP going forward.
Um, costs in q1 will likely be up around $20 a ton before normalizing into Q2.
Uh, guidance and uh for q1 and the rest of 2026. So for q1 shipment should return back to that 4 million ton Mark. Um, and that's lar. Largely driven by improved demand both in the US and Canada.
Q1 auto shipments are expected to improve back to the call at Q3 '25 levels or better.
Um, but as I mentioned earlier, on a full year basis, uh, the cost from 25 to 26 on a 4 year basis, is it is expected to decline, 10%, um, with, you know, further further, even with adjustments for a richer mix and the expiration of the slab contract. So on an Apple to Apples basis, the cost would be down even more, uh, but should be down around ten dollars per ton with the current construct.
Lourenço Gonçalves: The monthly lag, the quarter lags, and the spot pricing are all up. Canadian pricing is also improving. We talked about the end of the slab contract. The automotive volumes increasing is also a benefit. The way that we calculate ASP has changed slightly. So let me give you guys the new kind of guidelines for that, given the expiration of the slab contract, and the increased automotive volume. The way to think about it going forward is around 35% to 40% is on a fixed full-year price with resets throughout the year, obviously. Then 25% of the volumes are on a CRU month lag. 10% is on a CRU quarter lag. Then the balance, call it 25% to 30%, is the spot and other, including the Stelco volume. So that's the way to think about ASP going forward.
Celso Goncalves: The monthly lag, the quarter lags, and the spot pricing are all up. Canadian pricing is also improving. We talked about the end of the slab contract. The automotive volumes increasing is also a benefit. The way that we calculate ASP has changed slightly. So let me give you guys the new kind of guidelines for that, given the expiration of the slab contract, and the increased automotive volume. The way to think about it going forward is around 35% to 40% is on a fixed full-year price with resets throughout the year, obviously. Then 25% of the volumes are on a CRU month lag. 10% is on a CRU quarter lag. Then the balance, call it 25% to 30%, is the spot and other, including the Stelco volume. So that's the way to think about ASP going forward.
Um, I think with that you should have everything you need for.
to get a sense for q1 and, and
I think so, um guys, I appreciate the detail as always and continue the best of luck.
Um as I mentioned, ASP is expected to be up. $60 a tonne uh in q1 all that pricing that negative negatively impacted Q4 is now positive for for q1. The monthly lag, the quarter lags and the spot pricing are all up. Canadian pricing is also improving. Um, you know, we talked about the end of this slab contract and and the automotive volumes in uh, increasing is also a benefit.
Thank you.
Thank you. Next question, is coming from Boston? Winter from Bank of America. Your line is now live.
Um, the way that we calculate ASP has changed slightly. So let me give you guys the new kind of guidelines for that, given the expiration of the slab contract and the increased automotive volume.
Your price with resets throughout the year, obviously. And then 25% of the volumes are on a CU month, lag.
10% is on a CU quarter lag.
Uh, yeah, thank you very much. Operator and good. Good morning. I'm so, and so, uh, nice to hear from you, and thank you for the update. Um, if I could ask on Pasco, um, like I think there's no question that, it, that it is serious and potentially transformational, for for Cliffs. I, I was just curious, if you you made the remarks that, um, Pasco is still continuing, their due diligence has Cleveland Cliffs completed. Uh, it's due diligence, uh, on on Pasco.
And then the, the balance call it 25 to 30% is the spot uh and other including the stelco volume. So that's the way to
To think about ASP going forward.
Lourenço Gonçalves: Costs in Q1 will likely be up around $20 a ton before normalizing into Q2. But as I mentioned earlier, on a full-year basis, the cost from 2025 to 2026 on a full-year basis is expected to decline $10 per ton further even with adjustments for richer mix and the expiration of the slab contract. So on an apples-to-apples basis, the cost will be down even more but should be down around $10 per ton with the current construct. I think with that, you should have everything you need to get a sense for Q1 and the full year 2026. Thanks, so. Guys, I appreciate the detail as always and continue the best of luck. Thank you. Thank you. Next question is coming from Lawson Winder from Bank of America. Your line is now live. Yes, thank you very much, operator. And good morning, Lourenco, and Celso.
Celso Goncalves: Costs in Q1 will likely be up around $20 a ton before normalizing into Q2. But as I mentioned earlier, on a full-year basis, the cost from 2025 to 2026 on a full-year basis is expected to decline $10 per ton further even with adjustments for richer mix and the expiration of the slab contract. So on an apples-to-apples basis, the cost will be down even more but should be down around $10 per ton with the current construct. I think with that, you should have everything you need to get a sense for Q1 and the full year 2026.
Look uh yes. That that that's correct. Uh, number 1 number 2, keep in mind. Uh Lawson they came to us. We did not look for them.
Um, costs in q1 will likely be up around 20 a time before normalizing into Q2.
So, that's a very important point to consider. So that shows that, uh, we feel like they need us. Uh,
probably much more than we need them.
That's my view. Uh,
That said, we are proud of our, our negotiation and our conversation and our potential uh partnership.
Um, but as I mentioned earlier, on a full year basis, uh, the cost from 25 to 26 on a 4 year basis is is expected to decline ten dollars per ton. Um with you know, further further, even with adjustments for richer mix and the expiration of the slab contract, so on an Apples to Apples basis. The cost would be down even more, uh, but should be down around ten dollars per ton with the current construct.
1 thing to keep in mind.
Um, I think with that you should have everything you need for.
to get a sense for q1 and, and
Nick Giles: Thanks, so. Guys, I appreciate the detail as always and continue the best of luck.
And the full year 2026.
Our Cleveland Clips board of directors will not approve any deal. That's not a creative to our shareholders. So, uh, that's what we're working on.
Celso Goncalves: Thank you.
Operator: Thank you. Next question is coming from Lawson Winder from Bank of America. Your line is now live.
So, um, guys, I appreciate the details as always, and continue the best of luck.
Thank you.
Uh, forming a partnership with bizarre. Number 1, strategic priority at this point.
and,
Lawson Winder: Yes, thank you very much, operator. And good morning, Lourenco, and Celso.
Based on what they said. They said to us, that's the same thing for postal.
Thank you. Next question is coming from Boston Winter from Bank of America. Your line is now live.
Lourenço Gonçalves: Nice to hear from you. And thank you for the update. If I could ask on POSCO, I think there's no question that it is serious and potentially transformational for Cliffs. I was just curious. You made the remark that POSCO is still continuing their due diligence. Has Cleveland-Cliffs completed its due diligence on POSCO? Look, yes. That's correct, number one. Number two, keep in mind, Lawson, they came to us. We did not look for them. So that's a very important point to consider. So that shows that we feel like they need us probably much more than we need them. That's my view. That said, we are proud of our negotiation, our conversation, and our potential partnership. One thing to keep in mind, our Cleveland-Cliffs board of directors will not approve any deal that's not accretive to our shareholders. So that's what we're working on.
Lawson Winder: Nice to hear from you. And thank you for the update. If I could ask on POSCO, I think there's no question that it is serious and potentially transformational for Cliffs. I was just curious. You made the remark that POSCO is still continuing their due diligence. Has Cleveland-Cliffs completed its due diligence on POSCO?
Uh, we believe that.
Lourenço Gonçalves: Look, yes. That's correct, number one. Number two, keep in mind, Lawson, they came to us. We did not look for them. So that's a very important point to consider. So that shows that we feel like they need us probably much more than we need them. That's my view. That said, we are proud of our negotiation, our conversation, and our potential partnership. One thing to keep in mind, our Cleveland-Cliffs board of directors will not approve any deal that's not accretive to our shareholders. So that's what we're working on.
Uh, yes, thank you very much. Operator and good, good morning, laureno, and salsa. Uh, nice to hear from you and thank you for the update. Um, if I could ask on Pasco, um, like I think there's no question that it, that it is serious, and potentially transformational for for Cliffs. I, I was just curious. You, you made the remark that, um, Pasco is still continuing, their due diligence has Cleveland Cliffs completed. Uh, it's due diligence, uh, on on Pasco.
We would be able to provide to postal the ability to meet the restraint and origy requirements, particularly melting and poor into the United States in a short term. Uh, what they need absolutely need. Uh, they will not be able to sell here without uh uh, complying with that requirement.
Uh, that thing is not going to change its clear at this point.
And uh, this is a market that everybody wants to be in.
Look, uh, yes, that—that's correct. Uh, number one, number two, keep in mind, uh, Lawson, they came to us. We did not look for them.
So, that's a very important point to consider. So that shows that, uh, we feel like they need us. Uh,
Probably much more than we need them.
That's my view. Uh,
That said, we are proud of our, our negotiation and our conversation and our potential uh partnership.
1 thing to keep in mind.
And we are the only possibility for any company that outside of the border of the United States, to be inside the border of the United States. So postco is in the pole position in a very comfortable position to have a a partnership with us. We absolutely love working with them and they seem to like working with us now, it's a matter of finalizing a, a a, a an agreement that secretary
To both clips and post what should not be different difficult to, to accomplish?
Our Cleveland-Cliffs board of directors—we will not approve any deal that's not accretive to our shareholders. So, uh, that's what we're working on.
Lourenço Gonçalves: Forming a partnership with POSCO is our number one strategic priority at this point. And based on what they say to us, that's the same thing for POSCO. We believe that we would be able to provide to POSCO the ability to meet US trade and origin requirements, particularly melted and poured into the United States in a short term, what they need, absolutely need. They will not be able to sell here without complying with that requirement. That thing is not going to change. It's clear at this point. And this is a market that everybody wants to be in. And we are the only possibility for any company that's outside of the border of the United States to be inside the border of the United States. So POSCO is in the pole position, in a very comfortable position to have a partnership with us.
Lourenço Gonçalves: Forming a partnership with POSCO is our number one strategic priority at this point. And based on what they say to us, that's the same thing for POSCO. We believe that we would be able to provide to POSCO the ability to meet US trade and origin requirements, particularly melted and poured into the United States in a short term, what they need, absolutely need. They will not be able to sell here without complying with that requirement. That thing is not going to change. It's clear at this point. And this is a market that everybody wants to be in. And we are the only possibility for any company that's outside of the border of the United States to be inside the border of the United States. So POSCO is in the pole position, in a very comfortable position to have a partnership with us.
Uh, forming a partnership with Bizarre. Number one strategic priority at this point.
And based on what they say, they say to us that's the same thing for POSCO.
Uh,
we believe that.
Thank you, Lorenzo. That was very helpful if I could ask 1 um uh following question, um, just on the aluminum opportunity. I mean I think it's it's it's really intriguing. Could could you maybe frame that up for us in terms of the size of the opportunity to to take share from aluminum in terms of tonnages and then what would be the the timeline to achieve those Tes?
We would be able to provide to push the ability to meet to restrict and ory requirements, particularly melting and poor into the United States in a short term. Uh, what they need absolutely need. Uh, they will not be able to sell here without uh uh, complying with that requirement.
Yeah. Look these were the type of thing that we have been have been asking for a a a an opportunity to prove ourselves to our our clients and for some reason they were committed to uh, keep the status quo in place until they are no longer because uh, it's not just the ones that use massive amounts of aluminum.
Uh, that thing is not going to change. It's clear at this point.
And, uh, this is a market that everybody wants to be in.
Lourenço Gonçalves: We absolutely love working with them, and they seem to like working with us. Now, it's a matter of finalizing an agreement that's accretive to both CLIFFS and POSCO, which should not be difficult to accomplish. Thank you, Lourenco. That was very helpful. If I could ask one following question. Just on the aluminum opportunity, I mean, I think it's really intriguing. Could you maybe frame that up for us in terms of the size of the opportunity to take share from aluminum in terms of tonnages? And then what would be the timeline to achieve those tonnages? Yeah, look, this was the type of thing that we have been asking for an opportunity to prove ourselves to our clients.
Lourenço Gonçalves: We absolutely love working with them, and they seem to like working with us. Now, it's a matter of finalizing an agreement that's accretive to both CLIFFS and POSCO, which should not be difficult to accomplish.
Uh, that's obvious, that's absolutely obvious. We can't rely on a, a supply chain of aluminum that is very weak in the United States. And they proved that by having a succession of fires in the same plant in in space of 40 days or 45 days. Uh, and also truly dependent from uh, aluminum produced abroad. Knowing that Canada is another country. Like they, they like to say we are not a 51st state. Yes, we agree with that. It's outside of the border of the United States. It's another country. Yes.
And we are the only possibility for any company that outside of the border of the United States, to be inside the border of the United States. So postco is in the poor position in a very comfortable position to have a partnership with us. We absolutely love working with them and they seem to like working with us now, it's a matter of finalizing a a, a an agreement that secretive to both clips, and
Lawson Winder: Thank you, Lourenco. That was very helpful. If I could ask one following question. Just on the aluminum opportunity, I mean, I think it's really intriguing. Could you maybe frame that up for us in terms of the size of the opportunity to take share from aluminum in terms of tonnages? And then what would be the timeline to achieve those tonnages?
Post, what should not be different, difficult to accomplish?
so that's why there are subject to section 232 and you continue to be because there are another country
So, aluminum from Canada is not a strategic solution for the supply chain.
And then we proved our point that stamping aluminum or stamping Steel.
Lourenço Gonçalves: Yeah, look, this was the type of thing that we have been asking for an opportunity to prove ourselves to our clients. For some reason, they were committed to keep the status quo in place until they are no longer because it's not just the ones that use massive amounts of aluminum. That's obvious. That's absolutely obvious. We can't rely on a supply chain of aluminum that is very weak in the United States. They proved that by having a succession of fires in the same plant in a space of 40 days or 45 days.
For the type of Steels that weak level includes produce is the same thing. And we proved that at this point with 3 different oems and they know what they need to do and we are ready for them.
Lourenço Gonçalves: For some reason, they were committed to keep the status quo in place until they are no longer because it's not just the ones that use massive amounts of aluminum. That's obvious. That's absolutely obvious. We can't rely on a supply chain of aluminum that is very weak in the United States. They proved that by having a succession of fires in the same plant in a space of 40 days or 45 days. They are also truly dependent from aluminum produced abroad, knowing that Canada is another country. Like they like to say, "We are not a 51st state." Yes, we agree with that. It's outside of the border of the United States. It's another country. Yes. So that's why they are subject to Section 232 and will continue to be because they are another country.
Yeah, look at this was the type of thing that we have been have been asking for a a a an opportunity to prove ourselves to our our clients and for some reason they were committed to, uh, keep the status quo in place until they're no longer because, uh, it's not just the ones that use a massive amount of aluminum.
We are getting orders at a production skill basis, and, uh, this should only be growing and the potential is the potential of the size of for aluminum, uh, utilize, uh, the best selling vehicle, uh, in the United States, in has a lot of aluminum on the outside, we are starting to produce parts for that vehicle.
That's why I can tell you without the try triggering. Any, uh, problems with my clients.
That's very helpful. Thank you very much.
Lourenço Gonçalves: They are also truly dependent from aluminum produced abroad, knowing that Canada is another country. Like they like to say, "We are not a 51st state." Yes, we agree with that. It's outside of the border of the United States. It's another country. Yes. So that's why they are subject to Section 232 and will continue to be because they are another country.
Thank you. Thank you. Next question. Today, is coming from Alex hacking from City of your line is now live.
Yeah, thanks morning. Um, can you maybe quantify how big of a drag on earnings stelco has been for the past few quarters?
Success on fires in the same plant in the space of 40 days or 45 days. And also truly dependent from aluminum produced abroad. Knowing that Canada is another country—like, they like to say, 'We're not a 51st state.' Yes, we agree with that. It's outside of the border of the United States. It's another country. Yes.
Lourenço Gonçalves: So aluminum from Canada is not a strategic solution for the supply chain. And then we proved our point that stamping aluminum or stamping steel for the type of steels that we, Cleveland-Cliffs, produce is the same thing. And we proved that at this point with three different OEMs, and they knew what they need to do, and we are ready for them. Timing is on their control, not my control. We are ready. We proved that. We are getting orders at a production scale basis. And this should only be growing. And the potential is the potential of the size of aluminum utilized. The best-selling vehicle in the United States has a lot of aluminum in the outside. We are starting to produce parts for that vehicle. That's all I can tell you without triggering any problems with my clients. That's very helpful. Thank you very much. Thank you.
Lourenço Gonçalves: So aluminum from Canada is not a strategic solution for the supply chain. And then we proved our point that stamping aluminum or stamping steel for the type of steels that we, Cleveland-Cliffs, produce is the same thing. And we proved that at this point with three different OEMs, and they knew what they need to do, and we are ready for them. Timing is on their control, not my control. We are ready. We proved that. We are getting orders at a production scale basis. And this should only be growing. And the potential is the potential of the size of aluminum utilized. The best-selling vehicle in the United States has a lot of aluminum in the outside. We are starting to produce parts for that vehicle. That's all I can tell you without triggering any problems with my clients.
So that’s why there are some subjective Section 232, and you continue to be, because there is another country.
So, aluminum from Canada is not a strategic solution for the supply chain.
Um, and and therefore kind of by proxy how much potential upside there is. You know, it's Canadian markets, turn around and just for context, you know, we're looking at a Canadian publicly traded period, That's guiding to losing.
And then we proved our point that stamping aluminum or stamping steel—
You know, over $50 a ton of IB guitar and 4 q. I assume stellos doing better than that but but yeah, anything you could do to help quantify that. Thank you.
For the type of Steels that weak Cleveland includes produce is the same thing. And we proved that at this point with 3 different oems and they knew what they need to do and we are ready for them.
Yeah. Hey Alex. It's also um you know we don't we don't break down ebita by mil but but obviously stelco was disappointing in 2025 as you can imagine. Um, but the good news is that um, they're a contributor now uh we've seen a lot of improvement recently that will lead to significant ebit increase in 2026.
Timing is on their control, not my control. We are ready. We prove that we are getting orders at a production scale basis. And, uh, this should only be growing, and the potential is the potential of the size of our aluminum, uh, utilized. Uh, the best selling vehicle, uh, in the United States and has a lot of aluminum on the outside—we are starting to produce parts for that vehicle.
Lawson Winder: That's very helpful. Thank you very much.
That's why I can tell you, without the try triggering, any, uh, problems with my clients.
Lourenço Gonçalves: Thank you.
That's very helpful. Thank you very much.
Lourenço Gonçalves: Thank you. Next question today is coming from Alex Hacking from Citi. Your line is now live. Yeah, thanks. Morning. Can you maybe quantify how big of a drag on earnings Stelco has been for the past few quarters and therefore kind of by proxy how much potential upside there is as Canadian markets turn around? And just for context, we're looking at a Canadian publicly traded peer that's guiding to losing over $250 a ton of EBITDA in Q4. I assume Stelco is doing better than that. But yeah, anything you could do to help quantify that. Thank you. Yeah, hey, Alex. It's Celso. We don't break down EBITDA by mill, but obviously, Stelco was disappointing in 2025, as you can imagine. But the good news is that they're a contributor now. We've seen a lot of improvement recently that will lead to significant EBITDA increase in 2026.
Operator: Thank you. Next question today is coming from Alex Hacking from Citi. Your line is now live.
Alex Hacking: Yeah, thanks. Morning. Can you maybe quantify how big of a drag on earnings Stelco has been for the past few quarters and therefore kind of by proxy how much potential upside there is as Canadian markets turn around? And just for context, we're looking at a Canadian publicly traded peer that's guiding to losing over $250 a ton of EBITDA in Q4. I assume Stelco is doing better than that. But yeah, anything you could do to help quantify that. Thank you.
Thank you. Thank you. Next question today is coming from Alex Hacking from Citi. Your line is now live.
And if you think of the big picture on a net basis, even though they haven't been contributing to the bottom line, it has kind of changed the Dynamics of the market and has helped our us business. And that's only going to be Amplified here. Um, as HRC pricing in the US, has found some put some footing at a higher level. So you can't really think of stelco as a standalone. We're happy with uh, the asset, we're happy with the people they have, we have great people that work for us at stelco. Um, but you have to think of the business as a whole and going forward, they're going to be a much bigger contributor to the big picture.
Yeah, thanks, morning. Um, can you maybe quantify how big of a drag on earnings Stelco has been for the past few quarters?
Yeah, uh Alex loras here. Let me add a little bit more on on the scale, Compares with the, with the comparison, uh, the compared to had the same business models. Still
Um, and therefore, kind of by proxy, how much potential upside there is, you know, as Canadian markets turn around.
Selling to the United States.
And just for context, you know, we're looking at a Canadian publicly traded peer that's guiding to losing.
Celso Goncalves: Yeah, hey, Alex. It's Celso. We don't break down EBITDA by mill, but obviously, Stelco was disappointing in 2025, as you can imagine. But the good news is that they're a contributor now. We've seen a lot of improvement recently that will lead to significant EBITDA increase in 2026.
You know, over $250 a ton of IB, guitar, and 4 Q. I assume Stelco's doing better than that, but yeah, anything you could do to help quantify that. Thank you.
And uh, we bought stock to do 1 thing that the comparator was never willing to do uh, changing the business model to sell into Canada and we did, like I said, in my prepared remarks, a few days before Trump was President, Trump was elected.
Yeah. Hey, Alex. It's also, um,
Let alone. President Trump was in office and let alone. President Trump implementing section. 232 tariffs. In April. We did that. We did that. In November.
Lourenço Gonçalves: If you think of the big picture, on a net basis, even though they haven't been contributing to the bottom line, it has kind of changed the dynamics of the market and has helped our US business. And that's only going to be amplified here as HRC pricing in the US has found some footing at a higher level. So you can't really think of Stelco as a standalone. We're happy with the asset. We're happy with the people. We have great people that work for us at Stelco. But you have to think of the business as a whole. And going forward, they're going to be a much bigger contributor to the big picture. Yeah, Alex. Lourenco here. Let me add a little bit more on the Stelco comparison with a competitor. The competitor had the same business model as Stelco, selling to the United States.
Celso Goncalves: If you think of the big picture, on a net basis, even though they haven't been contributing to the bottom line, it has kind of changed the dynamics of the market and has helped our US business. And that's only going to be amplified here as HRC pricing in the US has found some footing at a higher level. So you can't really think of Stelco as a standalone. We're happy with the asset. We're happy with the people. We have great people that work for us at Stelco. But you have to think of the business as a whole. And going forward, they're going to be a much bigger contributor to the big picture.
You know, we don't, we don't break down EBITDA by mill, but obviously Stelco was disappointing in 2025, as you can imagine. Um, but the good news is that, um, they are a contributor. Now, uh, we've seen a lot of improvement recently that will lead to significant EBITDA increase in 2026.
So we were way ahead of the the the game in terms of what how to reposition Stow. Another thing that we we took from Stowe that we did not have uh before is made in Canada, called cook, cook in our cook better over there.
And if you think of the big picture on a net basis, even though they haven't been contributing to the bottom line, it has kind of changed the dynamics of the market and has helped our US business. And that's only going to be amplified here, um, as HRC pricing in the US has found some footing at a higher level. So you can't really think of Stelco as a standalone. We're happy with the asset, we're happy with the people they have. We have great people that work for us at Stelco.
Lourenço Gonçalves: Yeah, Alex. Lourenco here. Let me add a little bit more on the Stelco comparison with a competitor. The competitor had the same business model as Stelco, selling to the United States.
Which is a USMC compliant, uh, feed stock. So that was a benefit for us and that benefit will continue to be in place. Uh, the other thing is that if we had not had, uh, all the imports from the United States being redirected to Canada and have the Canadian government accepting that as normal course of business, would would have had a completely different 2025. You took us almost 1 entire year to convince the Canadian government, that that was a completely unsustainable situation.
Um but you have to think of the business as a whole and going forward, they're going to be a much bigger contributor to the big picture. Yeah. Uh Alex leso here, let me add a little bit more on on on the scale Compares with the with the comp the compared to had the same business models. Still
Lourenço Gonçalves: We bought Stelco to do one thing that the competitor was never willing to do, changing the business model to sell into Canada. And we did, like I said in my prepared remarks a few days before President Trump was elected, let alone President Trump was in office, and let alone President Trump implementing Section 232 tariffs in April. We did that in November. So we were way ahead of the game in terms of how to reposition Stelco. Another thing that we took from Stelco that we did not have before is made-in-Canada coke and now coke better over there, which is a USMEC-compliant feedstock. So that was a benefit for us. And that benefit will continue to be in place.
Selling to the United States.
Lourenço Gonçalves: We bought Stelco to do one thing that the competitor was never willing to do, changing the business model to sell into Canada. And we did, like I said in my prepared remarks a few days before President Trump was elected, let alone President Trump was in office, and let alone President Trump implementing Section 232 tariffs in April. We did that in November. So we were way ahead of the game in terms of how to reposition Stelco. Another thing that we took from Stelco that we did not have before is made-in-Canada coke and now coke better over there, which is a USMEC-compliant feedstock. So that was a benefit for us. And that benefit will continue to be in place.
And uh, we bought stock to do 1 thing that the comparator was never willing to do uh, changing the business model to sell into Canada and we did, like I said, in my prepared remarks, a few days before Trump was President, Trump was elected.
Let alone, president Trump was in office and let alone. President Trump implementing section, 232 tariffs, in April. That that we did that in November.
So we were way ahead of the the the game in terms of how to reposition stuff. Another thing that we we took from Stowe that we did not have uh before is made in Canada, Co cook in our cook better over there.
And, uh, uh, we finally they finally made a move, uh, uh, move. There was a lot smaller than the move that we would like them to make, but that that was enough for us to to, to, to, to see a completely different Dynamics in the domestic Market in Canada. So the comparison between stock and the comparator is not a good comparison. Got to be stopped for Cliffs and the sto, uh, uh, for Cliffs going forward. Uh, and uh, it's still for cliffs in 2025, was not as good as we envisioned basically because domestic Canadian prices went down due to the Avalanche of imports into Canada that has been put on hold, uh, that's has changed and we will have a completely different 2026 because of that.
Lourenço Gonçalves: The other thing is that if we had not had all the imports from the United States being redirected to Canada, and have the Canadian government accepting that as normal course of business, we would have had a completely different 2025. It took us almost one entire year to convince the Canadian government that that was a completely unsustainable situation. And they finally made a move, a move that was a lot smaller than the move that we would like them to make. But that was enough for us to see a completely different dynamics in the domestic market in Canada. So the comparison between Stelco and the competitor is not a good comparison. Got to be Stelco for Cliffs and Stelco for Cliffs going forward.
Lourenço Gonçalves: The other thing is that if we had not had all the imports from the United States being redirected to Canada, and have the Canadian government accepting that as normal course of business, we would have had a completely different 2025. It took us almost one entire year to convince the Canadian government that that was a completely unsustainable situation. And they finally made a move, a move that was a lot smaller than the move that we would like them to make. But that was enough for us to see a completely different dynamics in the domestic market in Canada. So the comparison between Stelco and the competitor is not a good comparison. Got to be Stelco for Cliffs and Stelco for Cliffs going forward.
Medium prices should be with the new Power policy versus where they are today. I don't know if you can comment on that at all. Thank you.
Which is a USMC compliant uh, feed stock. So there was a benefit for us and that benefit will continue to be in place. Uh, the other thing is that if we had not had uh, all the imports from the United States being redirected to Canada and have the Canadian government accepting that as normal course of business, would would have had a completely different 2025. You took us almost 1 entire year to convince the Canadian government, that that was a completely unsustainable situation.
Yeah, I like also said we we don't don't break down. Uh it's still uh results into our results. So we do not disclose that but it's easy to see that based on how bad 2025 was and use the the comparator as as the reference for that specific point. Uh you see that uh there will be like in day so there will be a contributor and there to be a significant contributor to Cliff's results.
Thank you.
You're welcome.
Thank you. Next question. Today, is coming from Albert rein from Jeffrey. Your line is now live.
Lourenço Gonçalves: Stelco for Cliffs in 2025 was not as good as we envisioned, basically because domestic Canadian prices went down due to the avalanche of imports into Canada. That has been put on hold. That has changed. We will have a completely different 2026 because of that. Thanks for the caller. I guess just following up, how much better can 2026 look? On the price side, where do you think Canadian prices should be with the new tariff policy versus where they are today? I don't know if you can comment on that at all. Thank you. Yeah, like Celso said, we don't break down Stelco results into our results. So we do not disclose that. But it's easy to see that based on how bad 2025 was and use the competitor as the reference for that specific point, you'll see that there will be night and day.
Lourenço Gonçalves: Stelco for Cliffs in 2025 was not as good as we envisioned, basically because domestic Canadian prices went down due to the avalanche of imports into Canada. That has been put on hold. That has changed. We will have a completely different 2026 because of that.
Alex Hacking: Thanks for the caller. I guess just following up, how much better can 2026 look? On the price side, where do you think Canadian prices should be with the new tariff policy versus where they are today? I don't know if you can comment on that at all. Thank you.
They finally made a move. I I moved there was a lot smaller than the move that we would like them to make. But there there was enough for us to to, to to, to see a completely different Dynamics in the domestic Market in Canada. So, the comparison between stock and the comparator is not a good comparison. Got to be, is top of for Cliffs and the stock, uh, uh, for Cliffs going forward. Uh, and, uh, this topic for cliffs in 2025, was not as good as we envision. Basically, because domestic Canadian prices went down due to the Avalanche of imports into Canada that has been put on hold that's has changed. And we will have a completely different 2026 because of that.
Hey, good morning, Lorenzo sell. So thank you for taking my question. Um, so just also I think you kind of alluded to it a bit but the 425 million in total proceeds that are potentially under contract, closure and agreement. Um, I think you had said that doesn't include some of the larger uh scale assets. And I think you had mentioned that those would be on hold until you know anything with Pasco or to be finalized. So I guess what I'm asking is that total amount of proceeds from the asset sales could be a lot higher and then timing would be until um anything with Pasco would be finalized. Is that? Is that my understanding correct?
Lourenço Gonçalves: Yeah, like Celso said, we don't break down Stelco results into our results. So we do not disclose that. But it's easy to see that based on how bad 2025 was and use the competitor as the reference for that specific point, you'll see that there will be night and day. So they will be a contributor, and they're to be a significant contributor to CLIFFS results.
Thanks for the thanks for the caller. I guess just following up, you know, how how, how much better in 2026 look like on on the price side. You know, where do you think Canadian prices should be with the new tire policy versus where they are today? I don't know if you can comment on that at all. Thank you.
Yeah, like Sosa said, we—we don't, don't break down. Uh, it's still, uh, results into our results, so we do not disclose that, but it's easy to see that based on how bad 2025 was, and use the comparator as the reference for that specific point. Uh, you'll see that.
Lourenço Gonçalves: So they will be a contributor, and they're to be a significant contributor to CLIFFS results. Thank you. You're welcome. Thank you. Next question today is coming from Albert Riley from Jefferies. Your line is now live. Hey, good morning, Lourenco, Celso. Thank you for taking my question. So just Celso, I think you kind of alluded to it a bit. But the $425 million in total proceeds that are potentially under contract closure and agreement, I think you had said that doesn't include some of the larger-scale assets. And I think you had mentioned that those would be on hold until anything with POSCO were to be finalized. So I guess what I'm asking is that total amount of proceeds from the asset sales could be a lot higher. And then timing would be until anything with POSCO would be finalized. Is that my understanding correct? Yeah.
Alex Hacking: Thank you.
There will be a night and day, so there will be a contributor and there will be a significant contributor to Cliff's results.
Lourenço Gonçalves: You're welcome.
Thank you.
Operator: Thank you. Next question today is coming from Albert Riley from Jefferies. Your line is now live.
You're welcome.
Albert Realini: Hey, good morning, Lourenco, Celso. Thank you for taking my question. So just Celso, I think you kind of alluded to it a bit. But the $425 million in total proceeds that are potentially under contract closure and agreement, I think you had said that doesn't include some of the larger-scale assets. And I think you had mentioned that those would be on hold until anything with POSCO were to be finalized. So I guess what I'm asking is that total amount of proceeds from the asset sales could be a lot higher. And then timing would be until anything with POSCO would be finalized. Is that my understanding correct?
Thank you. Next question today is coming from Albert, really from Jeffrey. J. Line is not live.
Hey, good morning, Lorenzo. Thank you for taking my question. Um,
Yeah, so hey Albert. So the 425 million. That's the the totality of all of kind of our Idol. Uh, plants that were marketing and there's interest the board for for all of them. Um, we've received 60 million so far, but we're in, uh, we're in discussions to sell the rest and that would add up to the 425 beyond that. You know, we have the larger assets that we could sell that there's been some interest around, um, you know, specifically Toledo. Hbi and and, and, and, and so that would be in addition to the 425. Now we put these larger asset sales on hold. Uh given you know, cost goes interest in our business. They're looking across our entire footprint. Um so we don't want to jeopardize uh the Pasco opportunity which is much bigger but you know if for whatever reason if the Pasco opportunity worked to not materialize, we could pick up where we left off on the larger asset sales. Um, and we've had some
Meaningful interest in those as well. So that would be in addition to the 425 you're correct.
Understood, thank you.
So just also, I think you kind of alluded to it a bit, but the $425 million in total proceeds that are potentially under contract, closure, and agreement—I think you had said that doesn't include some of the larger-scale assets. And I think you had mentioned that.
Yeah, I was just I was light, correction was also said on the discussion, some of the, the discussions are already signed to contracts.
Celso Goncalves: Yeah. So hey, Albert. So the $425 million, that's the totality of all of kind of our idle plants that we're marketing. And there's interest across the board for all of them. We've received $60 million so far. But we're in discussions to sell the rest, and that would add up to the $425 million. Beyond that, we have the larger assets that we could sell that there's been some interest around, specifically Toledo HBI and FPT assets. So that would be in addition to the $425 million. Now, we put these larger asset sales on hold.
Lourenço Gonçalves: So hey, Albert. So the $425 million, that's the totality of all of kind of our idle plants that we're marketing. And there's interest across the board for all of them. We've received $60 million so far. But we're in discussions to sell the rest, and that would add up to the $425 million. Beyond that, we have the larger assets that we could sell that there's been some interest around, specifically Toledo HBI and FPT assets. So that would be in addition to the $425 million. Now, we put these larger asset sales on hold. Given POSCO's interest in our business, they're looking across our entire footprint. So we don't want to jeopardize the POSCO opportunity, which is much bigger. But for whatever reason, if the POSCO opportunity were to not materialize, we could pick up where we left off on the larger asset sales.
Those would be on hold until you know anything with Pasco or until it’s finalized. So I guess what I’m asking is, that total amount of proceeds from the asset sales could be a lot higher, and then the timing would be until anything with Pasco would be finalized. Is that— is my understanding correct?
so we are Beyond a little, a little beyond, the just discussions, we have contracts in place and uh it's a matter of going between a, a binding contract and a
Uh, uh, a sale agreement that, uh, at closing. So, it's this, this transactions are real. It's a matter of time to foreclosing. So like we have done so far. We the ones that already closed.
Got it. Thank you for the clarity.
Thank you. Thank you. We appreciate our question and answer session. I'd like to turn the call back over for a further. Closing comments.
Yeah, so hey Albert. So the 425 million. That's the, the totality of all of kind of our Idol. Uh, plants that were marketing and there's interest across the board for for all of them. Um, we've received 60 million so far, but we're in, uh, we're in discussions to sell the rest and that would add up to the 425 beyond that. You know, we have the larger assets that we could sell that there's been some interest around, um, you know, specifically Toledo. Hbi and, and, and and, and
Celso Goncalves: Given POSCO's interest in our business, they're looking across our entire footprint. So we don't want to jeopardize the POSCO opportunity, which is much bigger. But for whatever reason, if the POSCO opportunity were to not materialize, we could pick up where we left off on the larger asset sales. We've had some meaningful interest in those as well. So that would be in addition to the 425. You're correct.
Thank you very much and you you guys have enjoyed 2026 as much as equivalent Clips. Will I appreciate your interest in our company? Thanks a lot. Bye now.
Thank you. It does include today's sell the conference webcast. Let me just connect your line at this time and have a wonderful day. We thank you for your participation today.
Lourenço Gonçalves: We've had some meaningful interest in those as well. So that would be in addition to the 425. You're correct. Understood. Thank you. Yeah, Albert, just a slight correction. Celso said on the discussion, some of the discussions are already signed contracts. So we are beyond a little beyond just discussions. We have contracts in place. And it's a matter of going between a binding contract and a sale agreement at closing. These transactions are real. It's a matter of time for closing. So like we have done so far, we're the ones that already closed. Got it. Thank you for the clarity. Thank you. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments. Thank you very much. And you guys have enjoyed 2026 as much as Cleveland-Cliffs will.
Albert Realini: Understood. Thank you.
Assets. So that would be in addition to the $425. Now, we put these larger asset sales on hold, uh, given, you know, Pasco's interest in our business—they're looking across our entire footprint. Um, so we don't want to jeopardize the Pasco opportunity, which is much bigger. But, you know, if for whatever reason the Pasco opportunity were to not materialize, we could pick up where we left off on the larger asset sales, um, and we've had some meaningful interest in those as well. So that would be in addition to the $425, you're correct.
Lourenço Gonçalves: Yeah, Albert, just a slight correction. Celso said on the discussion, some of the discussions are already signed contracts. So we are beyond a little beyond just discussions. We have contracts in place. And it's a matter of going between a binding contract and a sale agreement at closing. These transactions are real. It's a matter of time for closing. So like we have done so far, we're the ones that already closed.
Understood, thank you.
Yeah, I was just—I was light. Correction was also said on the discussion. Some of the discussions are already signed to contracts.
Albert Realini: Got it. Thank you for the clarity.
Already closed.
Lourenço Gonçalves: Thank you.
Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.
Lourenço Gonçalves: Thank you very much. And you guys have enjoyed 2026 as much as Cleveland-Cliffs will.
Thank you. Thank you. We appreciate any of our question and answer session. I'd like to turn the call back over for any further closing comments.
Lourenço Gonçalves: I appreciate your interest in our company. Thanks a lot. Bye now. Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Lourenço Gonçalves: I appreciate your interest in our company. Thanks a lot. Bye now.
Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Thank you very much, and I hope you guys have enjoyed 2026 as much as Cleveland-Cliffs. Well, I appreciate your interest in our company. Thanks a lot. Bye now.
Thank you. Let us include today's seller conference webcast. Let me just connect your line at this time, and have a wonderful day. We thank you for your participation today.
