Economy
Algoma Plans for Higher Plate Production in Q3
Written by Laura Miller
June 22, 2023
Algoma Steel anticipates increasing its plate production in the third calendar quarter of this year.
Phase two of the Canadian steelmaker’s plate mill modernization project continues, CEO Michael Garcia said on the company’s fiscal fourth-quarter of 2023 earnings call with analysts on Thursday, June 22. The second phase had initially been expected to be finished by November 2022 but was delayed due to a longer-than-expected outage after completion of phase one last year.
The installation of an inline shear is now ahead of schedule, Garcia said, noting that cold commissioning is planned for August.
“We believe that once that commissioning is in place as soon as October, we will start to see more shipments and capacity through that plate mill. And over the balance of the third fiscal quarter and the fourth fiscal quarter, we would expect to see 15% to 20% more plate mill shipments,” he added.
That increase in plate shipments is from a current level of 70,000 to 75,000 tons per quarter, Garcia noted.
“This higher production will allow us to capture market opportunities and to build inventory ahead of the planned phase two hot mill outage to upgrade the hot mill drives currently scheduled in April of 2024,” Garcia stated.
Spending on infrastructure and durable goods provided solid demand in the quarter, allowing for plate to maintain its significant premium over hot-rolled coil, CFO Rajat Marwah said on the call.
The premium of plate over HRC began to balloon at the end of 2021 and has remained sizeable since then. A month ago, the spread between plate and HRC was US$495 per ton, according to SMU’s analysis. We will update that spread in this Sunday’s newsletter.
Marwah reminded those on the call that Algoma is the only Canadian producer of discrete plate.
By Laura Miller, laura@steelmarketupdate.com
Laura Miller
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