Why Did Cleveland-Cliffs Stock Pop Today?
Key Points
Cleveland-Cliffs is leaning more on the automotive market with a $1 billion investment.
Steel stocks are rebounding from some disappointing tariff news.
Lower tariffs on Canadian steel can actually provide a benefit to Cleveland-Cliffs.
- 10 stocks we like better than Cleveland-Cliffs ›
Shares of steelmaker Cleveland-Cliffs (NYSE: CLF) soared today after the company announced a major investment. That wasn't the only reason for the stock jumping 7% as of 12:23 p.m. ET, though.
The stock is also bouncing back, along with other steel stocks, after names in the sector plunged yesterday. That came after word that a tentative trade agreement between the U.S. and Canada might reportedly reduce tariffs on specific Canadian steel and aluminum exports from 50% to 25%.
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Cliffs stock is bouncing more than other steel names today after announcing a $1 billion investment in its operations. The investment is going to Cleveland-Cliffs' main facility, Middletown Works, located in Middletown, Ohio. It is their premier plant for manufacturing top-quality, automotive-grade steels specifically designed for exposed vehicle parts.
The investment will be partially made with a $500 million grant from the U.S. Department of Energy. The company plans to upgrade its blast furnace operation at Middletown Works with advanced technology to improve efficiency and extend its longevity.
That's helping the stock overcome yesterday's news of a potential reduction in Canadian steel tariffs. While lower tariffs on Canadian steel could put pressure on steel prices, it is also good news for Cliffs in one way. Cleveland-Cliffs made a $2.5 billion acquisition of the Canadian steelmaker Stelco in November 2024. That facility should benefit from the announced lower tariffs.
The market is rewarding Cleveland-Cliffs on both accounts today.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
