Steel Mills

Algoma guides to lower FYQ3 profit on UAW strike impact
Written by Michael Cowden
January 4, 2024
Canadian flat-rolled steelmaker Algoma Steel Group Inc. guided toward lower earnings in its fiscal 2024 third quarter, citing the United Auto Workers (UAW) strike and lower steel prices last fall.
“Due to the lagging nature of our order book, UAW strike-driven soft demand and pricing in the previous quarter and through October impacted our fiscal third-quarter results,” company CEO Michael Garcia said in a statement released with earnings guidance on Wednesday.
All told, the Sault Ste. Marie, Ontario-based company expects third quarter adjusted Ebitda to be anywhere from breakeven to a loss of CAD $10 million (USD $7.5 million) on shipments of approximately 515,000 tons.
Both figures are significantly lower than the CAD $81 million in adjusted Ebitda that Algoma posted in its fiscal second quarter on shipments of 548,998 tons.
Garcia said he expects results to improve in the company’s fiscal fourth quarter.
“In October, steel pricing began to recover in anticipation of a strike settlement, and since the strike’s end pricing has continued to improve, currently sitting near 12-month highs,” Garcia said.
“We expect this pricing strength, coupled with continued solid market fundamentals, to drive significantly improved realized pricing and overall fiscal results starting with our fiscal fourth quarter,” he added.
On the operations side, Algoma placed a “heavy focus” on seasonal maintenance in the third quarter, including a reline of its basic oxygen furnace. The company also remains on track and within budget in its project to convert from integrated steelmaking to EAF steelmaking, Garcia said.
He told SMU in November that construction of two new EAFs should be completed by the end of 2024. The new furnaces are expected to ramp up in 2025.

Michael Cowden
Read more from Michael CowdenLatest in Steel Mills

Despite trade chaos, Barry Schneider upbeat on SDI, steel
With 30 years of experience at Steel Dynamics, Barry Schneider reflects on the company and the state of the steel industry.

Algoma Steel seeks CAD$500M in operational support
Algoma Steel applied to Canada’s federal Large Enterprise Tariff Loan (LETL) program for $500 million to support its long-term operations.

SDI concerned with potential Brazil pig iron tariffs
Steel Dynamics Inc. (SDI) executives called a 50% tariff on Brazilian pig iron “concerning,” but think tariffs will be a “mainstay” of trade agreements going forward.

SDI earnings slip in Q2 as trade volatility hits customer orders
SDI profits slipped in second quarter amid trade policy volatility.

Cliffs puts ‘for sale’ signs up after another big quarterly loss
Cleveland-Cliffs lost more than $400 million for the third consecutive quarter but predicted results would improve in the second half of the year. And shares of the Cleveland-based steelmaker surged after company executives said during its Q2 earnings call on Monday that they could make billions by courting foreign investors or selling assets.