Algoma to see Q4 loss as cold commissioning of EAF project begins

CEO Michael Garcia said cold commissioning activities began in Q4 and are now accelerating, despite record snowfall in late November and early December briefly impacting work on the project.

“Our team is working hard on mitigating these impacts and we do not expect any material delay in our plan for first steel production by the end of the first quarter 2025,” Garcia said.

Algoma’s EAF transformation project entails two new EAFs, which will eventually replace the existing blast furnace and basic oxygen steelmaking ops. Once the project is completed, Algoma will have an annual raw steel production capacity of ~3.7 million short tons (st).

“We continue to make significant progress in our strategic transformation to become one of North America’s leading low-carbon steel producers, setting the stage for an exciting 2025,” he added.

Q4 earnings guidance

Algoma expects to post a Q4 adjusted EBITDA loss of between $55 million and $65 million Canadian dollars (US$38.1 million and US$45 million).

That compares to a net loss of CA$106.6 million in the quarter ended Sept. 30.

Note that Algoma said in November that it was changing its fiscal year end from March 31 to Dec. 31. It plans to give reclassified historical financial information in the current quarter.

The steelmaker’s total steel shipments during Q4 will be between 545,00 and 550,000 st. That’s up from 520,443 st in the quarter ended Sept. 30.

“Despite market headwinds, our results for the quarter demonstrated solid operational execution, particularly in our plate business where production continued on its upward trajectory,” Garcia said.

Algoma completed its plate mill modernization project last year. Its goal now is to reach the expected annual run rate capacity of more than 650,000 st.

“While macroeconomic uncertainties persist in the steel sector, we remain positioned to capitalize on improving fundamentals as conditions normalize,” the chief executive stated.

Editor’s note: Algoma Steel CEO Michael Garcia is a featured speaker at the upcoming Tampa Steel Conference. He’ll join SMU Senior Analyst Dave Schollaert for a fireside chat on the afternoon of Tuesday, Feb. 4. Please join us in Tampa to hear the latest on Algoma’s transformation directly from the project’s leader! For more information and to register, visit tampasteelconference.com.