Steel Mills

Algoma swings to loss on 'market challenges' and 'tariff uncertainties'

May 1, 2025

Algoma Steel Inc.

First quarter ended March 31	2025	2024	% Change
Net sales	$517.1	$620.6	-16.7%
Net earnings (loss)	$(24.5)	$28.0	-187.5%
Per diluted share	$(0.48) $	$0.10	-580%

(in millions of Canadian dollars except per share)

Canada’s Algoma Steel swung to a loss in the first quarter amid “market challenges” and “tariff uncertainties.” The company now expects first steel production from its initial EAF in the second quarter.

The Sault Ste. Marie, Ontario-based steelmaker recorded a net loss of Canadian $24.5 million (USD$17.7 million) vs. net income of CAD$28 million a year earlier. Net sales fell 17% to CAD$517.1 million (USD$373.4 million) in the same comparison.

“The first quarter of 2025 was an intense period of activity at our site, set against a backdrop of ongoing market challenges, Algoma CEO Michael Garcia said in a statement on Wednesday.

“Our financial and operational results were broadly in line with expectations, despite headwinds from tariff uncertainty and subdued demand and pricing in the steel market,” he added.

Regarding the company’s switch from blast furnace to electric-arc furnace steelmaking, Garcia said: “We now anticipate first steel production from our initial EAF during Q2, with no material change to our total project cost and our 2025 EAF production expectations.”

He remarked that the EAF milestone comes amid “significant volatility in the North American steel market, with evolving US tariffs — including those on Canadian steel and aluminum — adding uncertainty and driving increased imports into the Canadian market.”

Garcia said the company commissioned several critical systems in the quarter, including the fume treatment plant and the water treatment plant, positioned the furnace itself, and energized the substation.

“As a reminder, our start-up plan continues to include normal production from our existing steelmaking facility while ramping up steel production from our EAF in calendar 2025, followed by a complete switch to EAF production,” Garcia said in an earnings call on Wednesday.

He noted that following the EAF transition, Algoma’s facility is anticipated to have an annual raw steel production capacity of about 3.7 million short tons (st).

Algoma shipped 469,731 st in the first quarter, up 4% from 450,966 st a year earlier.

Tariff woes

“The currently imposed tariffs and the ongoing threat of sustained and/or additional tariffs has contributed to volatility in steel demand and pricing in both the US and Canadian markets, with concerns over supply chain disruptions leading to fluctuations in purchasing patterns,” Garcia said in the statement.

He also said uncertainty surrounding trade policies has impacted the US dollar exchange rate. This in turn “affects the company’s sales and cost structure by influencing raw material costs, pricing competitiveness, and cross-border trade dynamics.”

Garcia remarked: “In many cases, it is not feasible to pass on the tariff cost to customers.”

He said the tariff difficulties “may result in reduced production levels, higher costs, and lower operating margins.”

Garcia also said any of these “could have a material adverse effect on the company’s financial position, results of operations, and liquidity.”

In the first quarter, Algoma incurred tariff-related costs of CAD$10.5 million.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.