Steel Mills
Essar Steel Algoma Production in January Best Since 2014
Written by Sandy Williams
February 16, 2017
Essar Steel Algoma, under protection by the Companies’ Creditors Arrangement Act since November 2015, held its own in production and sales in January. January production surpassed 232,000 tons making it the highest single month production since September 2014. Improved selling prices and increased shipments brought in revenue of CAD $153 million in January for an adjusted EBITDA of $22 million for the month, $7 million higher than December. The company shipped an estimated 209,317 tonnes in January.
Essar Steel Algoma’s court monitor Brian Denega addressed in his Twenty-fifth Monitors Report a motion by Essar Capital to reopen the Sales Investment and Solicitation Process (SISP). Denega said in the report he does not believe there is a need to reopen the SISP. He suggests any party that is serious about acquiring or restructuring Algoma engage in Negotiations with the Term Lenders “rather than negotiating through the press, which tends to be not only unproductive but may well be harmful” to the CCAA proceedings.
The reference is in regards to a flurry of accusations that occurred between Essar Global Fund and Essar Steel Algoma and its Term Lenders after a letter from Essar Global was published in the press criticizing the SISP proceedings and requesting consideration as a bidder.
Collective bargaining commenced last week between the local unions and Essar Steel Algoma with a representative of the Term Lenders present for the discussions. The USW local has sought direction and advice from the court regarding engaging in discussions with Ontario Steel, an entity owned and controlled by Essar Global and favored by union workers. Denega strongly opposed the union’s motion, noting that Essar Global never submitted a formal bid for the company.
“Transactional discussions between Ontario Steel and the unions, where there is no concrete offer or proposal from Ontario Steel, much less one that has the necessary support of the term lenders and the consenting secured noteholders, will detract from this priority and would therefore be inappropriate and detrimental to Algoma’s restructuring process,” said Denega.
United Steelworkers Local 2251 intends to hold a strike mandate vote on Tuesday, February 28.
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.