Canada’s Algoma Steel is planning two 20-day outages next year as it brings the second phase of its plate mill modernization project online.
The first outage will occur in April 2024, and the Sault Ste. Marie, Ontario-based steelmaker will upgrade the 4Hi DC drive and the 2Hi onboard descaling system.
The second outage will come later in 2024, aligned with another planned maintenance outage, the company said. During the outage, upgrades will be made to the 4Hi onboard descaling system, and to the 4Hi mill alignment and work roll offset.
Two 20-day outages instead of one 40-day outage will help to mitigate the impact on the company’s customer base while also reducing commissioning risks, CEO Michael Garcia said on the company’s quarterly earnings call with analysts.
Despite the outages, production volumes are expected to be maintained throughout the year, Garcia said.
The CAD$135 million plate mill modernization project began in 2019. The first phase, completed in June 2022, focused on quality. The second phase, currently in the commissioning phase, is focused on productivity.
The company has installed and is presently commissioning the inline dividing shear and plate piler. The shear is expected to come online later this month. The work should be wrapped up by year’s end, allowing for higher production levels and the building of inventory in preparation for the planned outages.
“We expect to build inventories further during the calendar fourth quarter ahead of winter as we typically do at this point in the year and to release inventories in the first half of calendar 2024, heavily weighted towards the first quarter,” commented CFO Rajat Marwah.
Algoma’s Plate Business
As Canada’s only producer of discrete plate, the plate business is a very important segment for the steelmaker.
Roughly 70% of Algoma’s plate sales are to Canadian customers, with the remaining 30% going to the US, Garcia said.
Garcia commented that the company is “still seeing pretty robust demand from the plate business.” He noted some segments may be under a little more pressure than others, such as wind, but that isn’t a segment the company participates in.
“We still feel relatively confident about the plate spread and where our book of business is,” he stated.
Having encountered challenges during the first phase of the modernization project, the company is now working to recover its position with historical plate customers, Garcia noted.
Laura MillerRead more from Laura Miller
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