SunCoke swings to a loss as coke supply tightens

SunCoke Energy is heading into 2026 with a smaller coke footprint, firmer margins, and a fully sold-out book. Contract shifts, market softness, and an alleged breach by a major customer are reshaping the company’s supply position.

The Lisle, Ill.-based coke producer reported a full-year 2025 net loss of $44.2 million, driven largely by $109.3 million in one-time charges, the company said. This includes the permanent shutdown of the company’s Haverhill I facility.

Domestic coke sales fell to 3.67 million tons, down 360,000 tons year over year (y/y), as Algoma Steel’s alleged breach of contract forced SunCoke to redirect volumes into the spot and foundry markets.

“We have optimized our coke fleet with the closure of Haverhill I… and will be running at full utilization and are sold out for the year,” said CEO Katherine Gates on an earnings call. The shutdown reduces blast-furnace-equivalent capacity to 3.7 million tons, with 2025 sales expected at ~3.4 million tons once foundry coke conversion is factored in.

Contract mix, pricing pressure hit 2025 results

Domestic coke revenue dropped $203.5 million in 2025, with total net sales down 5.1% y/y to $1.84 billion. SunCoke swung to a loss of $44.2 million for the year from net earnings of $95.9 million in 2024.

Management cited lower pricing tied to a heavier mix of spot and foundry coke, and lower coal-to-coke yields. They additionally noted reduced economics on the extension of the Granite City contract, as well as lost volumes from Algoma’s contract breach.

Supply agreements extended

Still, SunCoke extended two important long-term supply agreements. The Granite City contract with U.S. Steel was extended through December 2026. And the Haverhill II contract with Cleveland-Cliffs now goes through 2028.

Both renewals lock in stable offtake but at lower margins than prior cycles, executives said.

Industrial services offsets some coke weakness

The acquisition of Phoenix Global in Q3’25 has reshaped the company’s non-coke portfolio. Industrial services EBITDA climbed to $62.3 million, up nearly $12 million y/y. This came even as terminal volumes fell to 20.3 million tons amid weak coal and bulk markets.

For 2026, SunCoke expects a rebound to ~24 million tons handled, supported by a full year of the new take-or-pay contract at KRT and modest recovery at CMT.

2026 outlook

SunCoke’s 2026 guidance calls for domestic coke EBITDA of $162 million to $168 million, with total adjusted EBITDA of $230 million to $250 million.

Executives on the call emphasized that while coke tons will be lower due to the Haverhill I shutdown and Algoma’s exit, margins per ton will improve thanks to a cleaner contract mix and full utilization across the remaining fleet.

Litigation with Algoma continues

SunCoke reiterated it is pursuing arbitration to recover losses arising from Algoma’s refusal to accept contracted volumes. Gates called it a “clear breach of contract” and noted that the alleged breach continued into 2026.

SMU reached out to Algoma for comment; a spokesperson said the company does not comment on matters before the courts.

SunCoke previously estimated the working-capital impact could reach $70 million, though mitigation efforts reduced the 2025 cash impact to $30 million.

Weather and turbine woes

Extreme winter weather and a turbine failure at Middletown will weigh on SunCoke’s first-half results. The outage – an insured event – will cut roughly $10 million from first-quarter EBITDA, with no power-related earnings expected until mid-year.