VALUATION HIGHLIGHTS

1. Steelmaking constitutes 97% of the Trefis price estimate for Cleveland-Cliffs Inc.'s stock.

WHAT HAS CHANGED?

1. Q4 2024 Earnings
   • For Q4 2024, Cleveland-Cliffs posted revenue of about $4.3 billion, down from over $5.1 billion in the year-ago quarter. Net loss came in at $434 million, down from a net loss of $139 million in the year-ago quarter. The decline was driven by lower steel price realizations and weaker shipments.

2. Cleveland-Cliffs Push Into Steel Making
   • In 2020, Cleveland-Cliffs acquired ArcelorMittal USA and AK Steel and transformed itself from an iron ore mining company to a vertically integrated steel producer. The company reported $18.5 billion in steelmaking revenues and 15.6 million tons of steel shipments in 2024. With a product portfolio including hot-rolled steel, cold-rolled steel, coated steel, stainless steel, and plates, the company caters to a wide customer base in the U.S.

3. Imposition of tariffs
   • The reinstatement of Trump-era steel tariffs in 2025, imposing a 25% duty on imported steel, is expected to have a mixed impact on U.S. steel demand. The tariffs will raise the cost of imported steel, leading to an increase in domestic steel prices. Industries that rely on steel, such as construction and automotive manufacturing, will face higher material costs, potentially reducing demand for steel-intensive projects. U.S. steel manufacturers are expected to benefit from reduced competition from imports, leading to increased domestic production and investment in steel facilities.

4. Potential impact of the federal government's infrastructure plan
   • The U.S. government has planned a ten-year $1.5 trillion overhaul of domestic infrastructure, focusing on transportation infrastructure. Once Congress has passed this infrastructure plan, it is expected to sharply boost the demand for steel and, consequently, iron ore in the U.S.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Cliffs' value that present opportunities for upside or downside to the current Trefis price estimate for Cleveland-Cliffs Inc.:

Steel Shipments (Tons)

• Total Steel Shipments: Steel Shipments rose from around 3.8 million tons in 2020 to 15.6 million tons in 2024. Trefis expects the metric to grow to about 18 million by the end of our review period. However, if shipments grow to about 20 million tons, there could be an upside of about 10% to our price estimate. On the other side, if shipments remain flat at about 16 million tons at the end of our review period, there could be a downside of about 10% to our price estimate.

For additional details, select a driver above or select a division from the interactive Trefis split for Cleveland-Cliffs Inc. at the top of the page.

BUSINESS SUMMARY

Cleveland-Cliffs is the largest flat-rolled steel producer and the largest manufacturer of iron ore pellets in North America. The company's operations are vertically integrated - spanning from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing. Cliffs is now North America's largest steel supplier to the automotive industry.

SOURCES OF VALUE

The North American Iron Ore division is the company's only reported segment currently and is the most valuable segment. The company gets its revenues from vertically integrated iron ore and steel manufacturing operations. CLF's major customers are steel companies and industrial customers - mainly automobile players. Long-term contracts with these customers ensure the sale of a substantial portion of the firm's mineral production.