SunCoke Energy announced a three‑year extension of its cokemaking supply agreement with Cleveland‑Cliffs that will begin on January 1 2026. The new contract obligates SunCoke to deliver 500,000 tons of metallurgical coke each year, mirroring the terms of the existing arrangement and providing a stable, take‑or‑pay revenue stream that is less sensitive to spot‑market price swings.
The extension is a key component of SunCoke’s 2026 financial outlook. Management has guided for adjusted EBITDA of $220 million to $225 million for 2025 and expects a measurable improvement in 2026, a projection that the new contract helps underpin by locking in a predictable portion of domestic coke sales. The deal also serves as a hedge against the 200,000‑ton inventory loss that resulted from a recent contract breach by an unnamed coke customer, a loss that was highlighted in SunCoke’s Q3 2025 earnings report.
Cleveland‑Cliffs, the largest flat‑rolled steel producer in North America, reported an operating margin of –8.26 % and a net margin of –8.97 % as of November 18 2025. The company’s financial profile underscores the importance of a reliable coke supply, making the extension strategically valuable for both parties. The agreement therefore aligns with Cleveland‑Cliffs’ need for stable input costs while giving SunCoke a secured revenue base.
SunCoke’s recent acquisition of Phoenix Global on August 1 2025 for $325 million expands its customer mix into electric‑arc‑furnace (EAF) operations and international markets. The acquisition is expected to be immediately accretive, with annual synergies projected at $5 million to $10 million, and complements the new Cleveland‑Cliffs contract by diversifying SunCoke’s exposure beyond traditional blast‑furnace customers.
The 200,000‑ton inventory impact from the contract breach was not tied to a specific customer in SunCoke’s public disclosures, but the company has indicated it is pursuing legal action to enforce the agreement. The breach highlighted the volatility of spot‑market contracts and reinforced the value of the take‑or‑pay arrangement with Cleveland‑Cliffs.
President and CEO Katherine Gates said the extension “affirms the long‑term partnership of SunCoke and Cleveland‑Cliffs” and emphasized the company’s focus on securing predictable revenue streams while expanding its service offerings through strategic acquisitions.
While the fact‑check report does not provide explicit market‑reaction data, the extension is expected to be viewed positively by investors and analysts because it delivers a stable revenue base and mitigates the impact of recent contract disruptions.
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