Iron & Steel miner and processor Cleveland Cliffs (CLF) bounced on Monday (10/20) after making a rare earth metals-related announcement. Then, the company gave it back on Tuesday (10/21). Did traders decide to take profits? Or was it a realization that saying there is a rare earth initiative and actually being able to deliver rare earth metals, are two very different things.
No CLF position. Maybe it will go on a watchlist.
Market overreacted, and then Wells analyst killed the rally with “strong sell” downgrade 
Are you suggesting CLF was pushed off the cliff?
From WFC…
Downgrading to Underweight from Equal Weight. We downgrade CLF after a sharp rally in recent weeks and Monday’s 21.5% move, which looks unwarranted. Shrs rose after mgmt noted: 1) an undisclosed MOU with a foreign steel mill; 2) potential rare earth deposits at its iron ore mines in MI, MN; 3) ~$425M of agreed upon asset sales. While we consider CLF a beneficiary of our view that U.S. spot sheet prices rebound into yr end, we think shrs now more than reflect a better 2026E.
Cleveland-Cliffs has definitely been a volatile pick lately. The steel sector’s cyclical nature makes it tough to time, especially with fluctuating demand from auto and construction. I’m holding a small position but keeping expectations conservative. If infrastructure spending ramps up again, CLF could recover quickly, though global steel overcapacity still poses a long-term risk.
Meanwhile steel is a major source of green house gases. Major investment will be needed to develop and install alternatives like expensive hydrogen.
Foreign investment as from Japan is a factor. Can CLF continue to be competitive.
Or will we depend on recycling scrap in an electric furnace? Or imported pig iron—letting some other country make the green house gases.
Big changes are coming. Will CLF be a leader?
There was a SeekingAlpha article suggesting that CLF could be one of the suppliers for the MASGA (Make American Shipbuilding Great Again) effort. That’s the effort by the South Korean shipbuilding companies (Hanwha, Samsung) lending their expertise to revive the Philadelphia shipyard. Whether they opt for US-produced steel in the first builds, or maybe, later builds, that is still not clear.
You are responding to an AI generated post…
Re: Global over capacity in steel. What does this imply?
Steel has to be a major aspect of manufacturing. Far into the future. Yes, plastic can be lighter and cheaper in some application, but steel is still fundamental to much manufacturing.
Once steel was a fundamental defense industry for tanks and ships etc. Maybe less so in peace time.
What is the long term growth rate of steel production? And what does that imply about the global economy? Is steel production in decline? Technology has to change due to green house gases. Major investment required. Who will be the winners?