Cleveland-Cliffs Surged 8.63% Intraday—Is This the Dawn of a Steel Renaissance?

Summary
• Cleveland-Cliffs (CLF) reported a record 4.3M net tons of steel shipments in Q2 2025.
• CEO Lourenco Goncalves announced $271M improvement in Adjusted EBITDA, citing footprint optimization.
• Tariff-driven domestic steel pricing and Trump administration support fuel investor optimism.
• CLF’s intraday price surged from $11.18 to $11.96, closing at $11.58 with 8.63% gains.

Today’s sharp rally in Cleveland-Cliffs reflects a confluence of strategic cost reductions, tariff tailwinds, and a bullish outlook for the domestic steel industry. With the stock trading at its highest level since March, the market is pricing in a potential reversal of fortune for the beleaguered steelmaker. The $271M EBITDA improvement and CEO’s aggressive tariff rhetoric have ignited a short-term surge, but sustainability will depend on execution risks and sector dynamics.

Cost-Cutting and Tariff Tailwinds Drive CLF's Sharp Intraday Surge
Cleveland-Cliffs’ 8.63% intraday rally was catalyzed by a combination of operational improvements and geopolitical positioning. The company’s Q2 report highlighted a $271M EBITDA improvement, driven by $15/ton cost reductions and inventory optimization. CEO Lourenco Goncalves emphasized the end of a problematic slab contract with a competitor in late 2025, which has been a drag on earnings. Simultaneously, the Trump administration’s 50% Section 232 tariffs on steel and Goncalves’ call for Canadian protectionism have positioned CLF as a beneficiary of a shrinking global supply. The stock’s sharp move higher reflects investor bets on near-term cash flow recovery and a re-rating of the steel sector amid protectionist policies.

Steel Sector Rally Gains Momentum as Arcelormittal Trails CLF’s Surge
The steel sector has seen mixed momentum, with Cleveland-Cliffs outpacing peers like Arcelormittal (MT), which gained 0.74% intraday. While CLF’s rally is tied to its aggressive cost-cutting and tariff positioning, the broader sector faces headwinds from China’s export price surges and EU CBAM implementation. Nucor’s recent price cuts and U.S.-EU steel price divergences highlight sector fragility. However, CLF’s unique vertical integration and automotive focus—coupled with Trump-era tariffs—position it to outperform in a scenario where domestic steel demand outpaces imports.

Options Playbook: Capitalizing on CLF's Bullish Momentum with High-Leverage Contracts
• MACD: 0.63 (bullish divergence from signal line 0.50)
• RSI: 78.4 (overbought territory, signaling exhaustion)
• Bollinger Bands: Current price at $11.58 sits above the upper band ($10.74), suggesting overextension.
• 200D MA: $9.85 (price trading 17% above, indicating strong momentum)

Technical Setup: CLF’s short-term bullish trend aligns with a break above its 52-week high of $15.71. Key support is the 200D MA ($9.85), with resistance at $12.00. The RSI’s overbought reading suggests a potential pullback, but the MACD’s positive histogram and high turnover (2.55% of float) indicate sustained buying pressure. For leveraged exposure, bold is unavailable, but options offer high-gamma opportunities.

Top Options Picks:
• CLF20250725C11.5 (Call, $11.5 strike, expires 7/25):
- IV: 88.53% (high volatility)
- Leverage Ratio: 23.70%
- Delta: 0.563 (moderate sensitivity)
- Theta: -0.119 (rapid time decay)
- Gamma: 0.366 (high sensitivity to price movement)
- Turnover: $43,612
Why: This contract offers a 385% price change ratio with high gamma, making it ideal for a short-term pop above $12.00. Payoff projection: 5% upside to $12.16 yields $0.66/share (66% return on strike).

• CLF20250725C12 (Call, $12 strike, expires 7/25):
- IV: 70.44%
- Leverage Ratio: 61.13%
- Delta: 0.345
- Theta: -0.081
- Gamma: 0.430
- Turnover: $199,339
Why: High liquidity and moderate delta balance risk-reward. A 5% upside to $12.16 generates $0.16/share (1.33% return on strike).

Hook: Aggressive bulls should target CLF20250725C11.5 for a breakout above $12.00. Traders with tighter risk tolerance may use CLF20250725C12 for a more conservative play.

Backtest Cleveland-Cliffs Stock Performance
The backtest of Cleveland Federal Reserve Bank's (CLF) performance following a 9% intraday surge indicates favorable short-to-medium-term gains, with win rates and returns improving across various time frames:These results suggest that investors may find opportunities in CLF following a significant intraday increase, with the potential for further gains in the following days and weeks. However, it's important to note that past performance is not always indicative of future results, and investors should consider other factors and market conditions before making investment decisions.

Steel's Resurgence: Positioning for CLF's Next Move
Cleveland-Cliffs’ intraday surge reflects a pivotal inflection in its cost-cutting and tariff-driven narrative. While the stock’s 8.63% jump has pushed it into overbought territory, the CEO’s strategic clarity and sector tailwinds justify a bullish bias. Key levels to watch include $12.00 (psychological resistance) and the 200D MA at $9.85. The broader steel sector, led by Arcelormittal’s 0.74% gain, remains volatile amid global trade tensions. Investors should monitor CLF’s ability to sustain above $11.58 and consider the recommended options for leveraged exposure. Act now: If $12.00 breaks, CLF20250725C11.5 offers explosive upside potential.