Cleveland-Cliffs slides as report shows Stelco idling plant over US tariffs

Investing.com -- Cleveland-Cliffs Inc. shares tumbled nearly 8% in late Monday trading following reports that its Canadian subsidiary, Stelco Holdings Inc., plans to halt operations at a key Ontario processing facility. The decline reflects growing market concern over the compounding toll of trade frictions on North American steel supply chains.

The operational curtailment marks a significant setback for the Canadian steel sector, which has struggled to adjust since the U.S. maintained a 50% tariff under Section 232 of the Trade Expansion Act. While Ottawa implemented countermeasures to curb foreign imports, Stelco noted that those actions proved insufficient to offset the market contraction triggered by restricted access to the U.S. market.

To mitigate the fallout, Cleveland-Cliffs is restructuring its operational footprint by shifting primary manufacturing focus to its more integrated Lake Erie Works facility in Nanticoke, Ontario. In an emailed statement sent to Bloomberg, Cliffs spokesperson Patricia Persico emphasized that total steel output will remain unchanged, though the product mix will pivot toward a higher concentration of hot-rolled coil.

The wind-down at the Hamilton facility is scheduled to begin on Oct. 9 and is expected to result in approximately 350 job cuts, according to local reporting from the Hamilton Spectator. Because Hamilton Works functions primarily as a downstream finishing plant, concentrating upstream production at Lake Erie Works allows the parent company to preserve overall tonnage while curtailing higher-cost processing lines.

Stelco assured clients that it will honor existing customer orders during the transition while maintaining full capacity for hot-rolled steel deliveries. Investors, however, appear focused on broader margin compression, watching closely to see whether Cleveland-Cliffs can successfully absorb trade-driven demand shifts without sacrificing profitability across its expanded North American network.

Original Article

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