Steel Mills
Essar Steel Algoma in Financial Straits
Written by Sandy Williams
November 4, 2015
Recent media reports indicate that Essar Steel Algoma may be heading for another return to insolvency as it struggles to meet its debts. According to media reports, the company has engaged a law firm and restructuring specialist to advise it and may file for insolvency by the end of the month.
Although Essar Steel Algoma has not confirmed the reports, spokesperson Brenda Stenta at Essar Steel Algoma provided SMU with the following statement.
“With regards to the current situation, we are operating our business as always with a focus on delivering the best quality product to our customers and the health and safety of our employees,” wrote Stenta.”
“Recent staff layoffs reflect difficult times in the international and domestic steel business overall. World steel prices have fallen dramatically over the past year as a result of overcapacity and reduced demand in the energy and mining sectors. In Canada, this pressure has been increased by the proliferation of low-priced steel flooding the market.”
The company laid off 100 employees last month at its plate and cold mills. Last week, salaried workers from USW Local 2742 were asked to vote on a work-share proposal that would allow two employees to share a job, avoiding complete job loss. Workers rejected the proposal in a 77-23 vote.
When Essar Steel Algoma was under court protection in July 2014, parent company Essar Global stepped in to provide funding. Soo Today reports that Essar Group has a plan to sell a 50 percent stake in Essar Oil to provide financing for its ailing steel segment abroad and in Canada. It is not confirmed that Essar will divert any of the funds of that sale to Algoma.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
AISI: April mill shipments fall, sheet down YTD
US steel mills saw a decline in shipments from March to April.
Hybar rolls first rebar, ramping up Arkansas mill commissioning
The startup steelmaker produced its first rebar at its greenfield steel mill in Osceola, Ark., marking a key milestone by completing construction in 22 months.
Goncalves: Despite higher tariffs, two Cliffs mills to remain idled
Cleveland-Cliffs Chairman, President, and CEO Lourenco Goncalves said he would keep one mill idled and still plans to idle another despite increased protections from Section 232 tariffs doubling to 50%.
Trump says Section 232 tariff on steel, aluminum to double to 50% at Pennsylvania rally celebrating Nippon-USS deal
At a rally celebrating a “planned partnership” between U.S. Steel and Nippon Steel, President Trump announced higher tariffs on steel and aluminum imports into the United States, and revealed few more details on Nippon’s investment in USS’ operations.
CRU: Trump hails a partnership of Nippon with USS
In a social media post, President Donald Trump said a planned partnership between Nippon Steel and U.S. Steel will add $14 billion to the US economy and ensure USS remains headquartered in Pittsburgh.