Steel Mills

Essar Steel Algoma Reports Operating Loss for Q1 FY 2016

August 29, 2015

Essar Steel Algoma announced that first quarter FY 2016, ending June 30, 2015, closed with a positive EBITDA of CDN $12.4 million. Capacity utilization was at 90 percent and steel shipments of 632,000 tons were 19 percent higher year over year. Higher production and shipments, however, were unable to counter low pricing caused by dumped imports, said the company. EBITDA was less than half that the CDN $12.4 million reported in first quarter FY 2014. The pricing impact resulted in an operating loss of CDN $28.9 million for the quarter.

Canada Border Services (CBSA) initiated antidumping and countervailing investigations on steel plate from India and Russia in June, 2015. The Canadian International Trade Tribunal (CITT) found in its preliminary determination that the imports in question caused material injury or the threat of material injury to the Canadian steel industry. A final ruling by CBSA is due Sept. 8 and duties, potentially retroactive to June 10, 2015, are expected to be imposed.

President and CEO Kaylan Ghosh commented on the trade case, ““This past year dumped imports have wreaked havoc on North American markets, displacing domestic market share and placing downward pressure on price. Despite recovering demand, we are just now witnessing some price recovery and with the prudent application of trade remedies we anticipate the return of a level playing field.”

Essar Steel Algoma also announced that work has begun on the company’s comprehensive Modernization and Expansion Program.

No mention was made of a possible interest in buying the bankrupt US Steel Canadian assets. Speculation has been rampant that Essar Steel is a potential bidder.