Published by: Robert England<>
25 Mar 2025 @ 21:37 UTC

In response to “the current reality of weak automotive production,” Cleveland-Cliffs will idle part of its production at its Dearborn, Michigan facility beginning on July 18, when it expects to have fully restored operations at its Cleveland Works No6 blast furnace (BF), the company announced on Tuesday March 25.

The idling of Dearborn’s blast furnace, basic oxygen furnace steel shop and continuous casting facilities will result in layoffs for about 600 people, according to the company.
Other operations in Dearborn will not be idled.
“The finishing facilities at Dearborn Works, including the pickling line tandem cold mill and the continuous galvanizing line, will continue to operate, supporting the continued employment of another 550 employees,” the company stated.
“These actions will allow the company to operate more efficiently and in a more cost competitive way for the current market environment,” the company stated.
The company remains optimistic it will be able to return to full production at Dearborn Works later in the year, “once President Trump’s policies take full effect and automotive production is re-shored,” the company said.
Last week the steelmaker announced it would be temporarily idling two iron ore mines — Minorca in Virginia and Hibbing in Minnesota — resulting in layoffs for 630 employees. That move was prompted by an accumulation of pig iron pellets in excess of expected needs, the company stated.
In September 2024 the company idled Cleveland’s No6 BF in the face of declining demand for automotive steel.
Cleveland-Cliffs’ planned shifts in production at the two locations — idling 2.2 million tonnes per year in Dearborn and ramping up 1.6 million tpy in Cleveland — represent a net reduction of about 600,000 tpy of production, according to Phil Gibbs, metal equity research analyst at Keybanc Capital Markets.
Gibbs said he expects a 2025 automotive production decline of 2-3%, following a decline of 1.5% in 2024.
The back-to-back decline in annual production is not a steady decline. Although production declined from early 2024 through the current quarter, it is expected to rise through the remainder of the year.
“A lot of the adjustment [in automotive steel demand] happened in the fourth quarter of 2024, and it’s happening in the first quarter of 2025,” Gibbs said.
One of the factors that have led to cutbacks at Cleveland-Cliffs is an increase in overall steel supply coming on line at US Steel’s Big River 2 in Osceola, Arkansas, and US Steel’s increased production in Sinton, Texas.
“In the big picture there still needs to be a balancing of supply and demand,” Gibbs said.
Cleveland-Cliffs is facing a squeeze in the rebalancing, in part because it is a higher-cost producer and is leveraged, according to the analyst.
Despite an estimated 600,000 tpy reduction in capacity, Cleveland-Cliffs is expected to have enough output to serve its contract customers, Gibbs said.
The analyst said it is not clear whether the new tariffs on imports is a factor impacting operations at Cleveland-Cliffs.
“I think it’s a watch point, and it’s something that could be a factor as the year plays out, but it’s difficult to say if that’s what factored into their decisions,” Gibbs said.
Automotive demand for steel has been tempered by reductions in dealer inventory from the Big Three automakers — General Motors, Ford and Stellantis — as they work to bring dealer supply back in line with customer demand, according to Gibbs.
“Stellantis has done that [reduction in dealer inventory]. GM and Ford have a little bit more to go,” he said.
Once the excess dealer inventory is gone, demand for new production — and with it demand for automotive steel — will move higher, the analyst said.
Some market participants are more optimistic about automotive steel demand for 2025.
A source at an automotive steel producer expects demand for 2025 to be higher than 2024.
“Our business has been steady year-to-date, and March and April are projected to be strong,” the source said.