Cleveland-Cliffs falls about 8% as its Stelco unit idles Hamilton finishing lines, blaming U.S. tariffs

Cleveland-Cliffs shares fell about 8% on Monday after its Canadian subsidiary, Stelco, said it will "indefinitely idle" the cold-rolled and coated steel operations at its Hamilton Works plant in Ontario, starting to wind them down on October 9. In a memo obtained by CBC News, Stelco called it "an unfortunate but necessary action to help ensure the survival of Stelco" in a market it described as "challenging and unsustainable" because of trade disruptions. The United Steelworkers local estimates 350 union members will be laid off.

Cliffs traded at $11.22 shortly before the close, down 7.9% from Friday's $12.18, according to Nasdaq data, on about 24.6 million shares, more than double its average volume. Rivals moved far less: Nucor was down 1.1% and Steel Dynamics 1.4%. Investing.com tied the drop to the Stelco news, noting the broader market was down only modestly.

The number behind the drop

At Nasdaq's market value figure, Monday's decline took roughly $550 million off Cliffs' equity value, from about $6.95 billion to about $6.40 billion (our calculation). For comparison, Cliffs agreed to buy Stelco in a cash-and-stock deal valued at C$3.4 billion that closed in November 2024, CBC reported. The idling affects only Stelco's downstream finishing lines, not the whole business.

That reaction says as much about Cliffs' balance sheet as about Hamilton. Investing.com pointed to a debt-to-equity ratio above 137%, which leaves little room to absorb lost volume. The stock is now about 33% below its 52-week high of $16.70.

What is closing and what is not

• Idled: cold-rolled and coated (galvanized) steel at Hamilton Works, which works mainly as a finishing plant.
• Continuing: hot-rolled steel. Stelco said its ability to supply hot-rolled products is not affected.
• Why: Stelco said its market for cold-rolled and galvanized products "has contracted significantly" while imports into Canada remain high. U.S. tariffs of up to 50% on certain Canadian steel, applied by executive order in June, have cut off much of its U.S. outlet, and Stelco said Canada's countermeasures have not closed the gap.

The two-sided tariff problem

The timing was awkward. On the same day, President Trump presented a planned $15 billion Iowa steel mill as proof that 50% steel tariffs are working, a project we covered earlier. Cliffs is on both sides of that policy. Its U.S. mills sit behind the tariff wall, while its Canadian unit is now shrinking because of it. Investing.com described this as "two-sided tariff exposure" that domestic rivals such as Nucor and Steel Dynamics do not share, and their shares fell only slightly on Monday.

There is also a labor question. Union local president Ron Wells told CBC that when Cliffs bought Stelco, it committed to maintaining the same number of unionized employees.

Who it affects

For Canadian manufacturers that buy galvanized or cold-rolled sheet from Hamilton, the question is where the next order comes from once current ones are filled. Stelco itself says imports already have a large share of that market, so buyers may end up leaning more heavily on imported coil. For Cliffs shareholders, the next checkpoint is the company's third-quarter report, where investors will look for the cost of the idling and any change to its Canadian commitments.

Sources: CBC News; Investing.com; Nasdaq quote data. Market-value figures are our calculations. This is market information, not investment advice.