Vale or Cleveland-Cliffs: Which Company Presents a More Attractive Investment Opportunity Today?

Vale S.A. and Cleveland-Cliffs Inc.: Industry Leaders in Iron Ore and Steel

Vale S.A. (VALE) and Cleveland-Cliffs Inc. (CLF) are influential companies within the global iron ore and steel markets. Vale, headquartered in Brazil, stands as a top iron ore producer, while Cleveland-Cliffs is recognized as a premier U.S. steel manufacturer and supplier of iron ore pellets. Both firms are deeply connected to trends in steel consumption, infrastructure investment, and broader industrial activity.

Vale’s operations extend beyond iron ore, encompassing nickel, copper, cobalt, and various precious metals such as gold, silver, and platinum group elements.

Spotlight on Cleveland-Cliffs

Cleveland-Cliffs has evolved into a fully integrated steel producer in North America, with a strong emphasis on value-added sheet steel for the automotive sector. The company’s transformation from an iron ore miner to a steelmaking powerhouse was accelerated by its acquisitions of AK Steel and ArcelorMittal USA in 2020. Today, Cleveland-Cliffs manages the entire production chain, from mining to finished steel products, including stamping, tooling, and tubing. Its self-reliance in sourcing raw materials—iron ore pellets, hot-briquetted iron (HBI), scrap, coking coal, and coke—gives it a strategic advantage.

Industry Outlook

The steel sector has grappled with overcapacity and surplus production, yet the long-term outlook remains positive, supported by ongoing urbanization and infrastructure expansion worldwide.

Vale: Recent Performance and Strategic Initiatives

In 2025, Vale achieved revenues of $38 billion, marking a 1% increase from the previous year. While higher sales volumes in copper, nickel, and iron ore, as well as improved copper prices, contributed positively, these gains were partially offset by lower prices for iron ore and nickel. Adjusted earnings per share reached $1.82, a 15% rise, underpinned by disciplined cost management.

Vale further reduced its all-in costs in 2025: iron operations by 3%, copper by 77%, and nickel by 27%, continuing a trend of cost reductions for the second year in a row.

Production results were robust, with iron ore output at approximately 336 million tons, copper at 382 thousand tons, and nickel at 177 thousand tons—all surpassing expectations. Iron ore and copper production reached their highest levels since 2018, while nickel output was the best since 2022.

Looking ahead, Vale aims to expand its iron ore production capacity to between 335 and 345 million tons in 2026, with a target of 360 million tons by 2030. Projects such as Vargem Grande 1 (VGR1) and Capanema Maximization are expected to add around 15 million tons per year each. Additional initiatives, including Compact Crushing at S11D and Serra Sul, are set to further increase capacity from the latter half of 2026.

Vale is also investing significantly in its base metals segment to capitalize on the global shift toward clean energy. Copper production is projected to range from 350 to 380 thousand tons in 2026, rising to 420–500 thousand tons by 2030 and reaching 700 thousand tons by 2035. This translates to an anticipated compound annual growth rate (CAGR) of 7% from 2024 to 2035, outpacing the industry average.

Projects like Bacaba are set to extend the life of the Sossego Mining Complex, with an expected average annual copper output of 50 thousand tons over eight years, starting in the first half of 2028. Other developments, including Salobo Coarse Particle Flotation (CPF), Alemão, and Cristalino, will further boost copper capacity.

Vale has also entered into an agreement with Glencore Canada to jointly assess a potential brownfield copper project in the Sudbury Basin, targeting a 2030 start-up. The company’s goal is to reach 700 thousand tons of copper production by 2035, primarily through accelerated development in the Carajás region.

For nickel, Vale expects output between 175 and 200 thousand tons in 2026, supported by projects in Canada, Pomalaa, Morowali, and the commissioning of a second furnace at Onça Puma. By 2030, nickel production is forecasted at 210–250 thousand tons, with contributions from Thompson Ultramafics, Sorowako HPAL, and various partnerships.

Cleveland-Cliffs: Financials and Strategic Moves

Cleveland-Cliffs reported revenues of $18.6 billion, a 3% decrease, and an adjusted loss of $2.48 per share—wider than the $0.74 per share loss in 2024—reflecting subdued automotive demand and lower steel prices.

The company anticipates improvement in 2026, projecting steel shipments of 16.5–17.0 million net tons, up from 16.2 million in 2025.

The North American automotive industry remains Cleveland-Cliffs’ largest market, making light vehicle production a critical demand driver. In 2025, light vehicle output in North America was 15.3 million units, below the pre-pandemic five-year average of 17 million units.

With the average age of U.S. vehicles at a record 12.8 years, replacement demand is expected to rise. Additionally, a 25% tariff on imported vehicles and parts could boost demand for domestically produced cars—and, by extension, U.S.-made steel. Lower interest rates may also spur vehicle purchases. As a leading supplier of automotive-grade steel, Cleveland-Cliffs is well-positioned to benefit from these trends.

The company has continued its cost-reduction initiatives, lowering year-over-year costs per ton and optimizing its operational footprint by exiting non-core businesses and securing long-term contracts with key automotive clients.

Cleveland-Cliffs is also exploring the potential for rare-earth element extraction at select ore bodies and tailings sites. While still in the early stages, success in this area could allow the company to tap into growing demand for domestically sourced rare-earth materials.

Comparing Analyst Estimates: VALE vs. CLF

According to Zacks, Vale’s consensus earnings estimate for fiscal 2026 suggests a 16.5% year-over-year increase, with 2027 earnings expected to grow by 2.5%. Both estimates have been revised upward in the past two months.

For Cleveland-Cliffs, the 2026 consensus points to a narrower loss of $0.38 per share, compared to a $2.48 loss in 2025. The 2027 estimate calls for earnings of $0.63 per share. However, both estimates have been revised downward over the last 60 days.

Image Source: Zacks Investment Research

Stock Performance and Valuation

Over the past year, Vale’s share price has surged by 72.2%, while Cleveland-Cliffs has declined by 1.9%.

Image Source: Zacks Investment Research

Vale currently trades at a forward price-to-sales ratio of 1.88, compared to Cleveland-Cliffs’ 0.29.

Image Source: Zacks Investment Research

Which Stock Is More Attractive: VALE or CLF?

Both Vale and Cleveland-Cliffs are poised to benefit from long-term steel demand driven by infrastructure and industrial growth. However, Vale stands out due to its diversified metals portfolio, strong operational performance, ongoing cost improvements, positive earnings outlook, and recent upward estimate revisions—making it a compelling investment choice.

Cleveland-Cliffs, meanwhile, continues to face earnings challenges, significant exposure to the cyclical automotive market, and persistent losses despite cost-saving measures. Downward estimate revisions and sensitivity to steel price volatility further cloud its prospects, even as management pursues strategic initiatives.

For investors seeking exposure to the sector, Vale appears to be the more favorable pick at present, while caution is advised regarding Cleveland-Cliffs. Currently, Vale holds a Zacks Rank #3 (Hold), whereas Cleveland-Cliffs is rated Zacks Rank #4 (Sell).