Algoma's losses widen in Q3 as tariff troubles continue

Algoma Steel’s net loss more than quadrupled in the third quarter on trade woes and its EAF transition. Separately, the company announced a change in leadership, as CEO Michael Garcia will retire at the end of the year.

The Sault Ste. Marie, Ontario-based steelmaker reported a net loss of Canadian $485.1 million (US$346.9 million) in the third quarter, widening 355% from a loss of CA$106.6 million a year earlier. Net sales fell 13% to CA$523.9 million (US$374.6 million) in the same comparison.  

The company logged shipments of 419,173 short tons (st) in Q3’25, down 19% from 520,443 st in the same period last year.

“The US steel market remains largely closed to us, and broader market conditions continue to present headwinds,” CEO Michael Garcia said in a statement on Wednesday.

He said Algoma’s focus remains on advancing its transition to EAF steelmaking, improving cost structure, and “positioning Algoma for sustainable profitability in the years ahead.”

Also on Wednesday, the company announced that Garcia will retire at year’s end, and CFO Rajat Marwah will take over as chief executive.

“The CA$500 million in liquidity support announced with the Government of Canada and the Province of Ontario will provide us with long-term financial flexibility and reinforce confidence in Algoma’s future,” Rafah said.

As reported last month, the company secured CAD$500 million in government-backed liquidity support.

At the end of Q3’25, the company had liquidity of CA$337.1 million. This includes CA$4.5 million in cash and CA$332.6 million available under its ABL credit facility.

Tariff troubles

Algoma said it’s continued to take a hit from US trade policy, including 50% Section 232 steel tariffs.

This has “significantly restricted access to the US market for Canadian producers.”

It has also led to “an oversupply of steel coil in Canada and substantial price compression across domestic markets.”

Canadian transactional pricing “was up to 40% lower” than US levels in Q3’25, the company said.

This resulted in revenue reductions of ~CA$32 million and CA$62 million for the three and nine months ended Sept. 30.

Additionally, direct tariff costs were CA$89.7 million and CA$164.3 million, respectively, in the same comparison.

US shipments were approximately half of total steel volumes.

EAF transition

As a result of the trade issues, Algoma is speeding up the decommissioning of its blast furnace and coke oven operations. It will replace this capacity with low-carbon steel production from its new EAF facility.

Additionally, the company plans to focus on discrete plate production, as Canada’s only producer of the product. Simultaneously, Algoma aims to cut back coil output “to better align with domestic demand.”

“This shift is expected to substantially reduce tariff exposure, lower operating costs, and enhance overall cash efficiency,” the company said.

Recall that in late September, Algoma told SMU: “We are carefully evaluating our options in light of these tariffs.”

In Q3’25, the EAF operations had a limited schedule of two days per week. This was due to market conditions, as well as to facilitate the completion of final installation and integration activities across the melt shop.

Algoma expects to switch to a five-day-per-week operating schedule in mid-November 2025.

“We are confident that the flexibility and structural cost advantages we are building through our investment in green steelmaking technology will serve us well across market cycles and create lasting value for all stakeholders,” Garcia said.