Canada
March 12, 2026
Algoma Steel resets business around Canada as tariffs shut door to US
Written by Laura Miller
Algoma Steel said the Section 232 tariff shock continues to shape its business model. The 50% US duty effectively shut the company out of its largest export market, forcing a structural pivot toward Canada.
CEO Rajat Marwah called the tariff “the defining challenge for our industry.” He noted the measure “fundamentally broke a cross-border business model that Canadian producers, including Algoma, had built over decades.”
He made the comments on an earnings call Thursday to discuss the Sault Ste. Marie, Ontario-based steelmaker’s fourth-quarter and full-year 2025 results. The company recorded a net loss of nearly CA$1 billion last year.
Market update
The shift in business, Marwah said, has driven excess supply into Canada and pushed domestic sheet prices “as much as 40% below comparable US levels.”
The demand picture also remains uneven. Plate continues to outperform sheet, supported by infrastructure, construction, and defense work.
Marwah said plate pricing is “much better than the sheet pricing,” with discounts running “anywhere between 15 to 20%” vs. US indexes, compared with roughly 40% on sheet.
Government actions to curb imports are beginning to help, though Marwah described the impact as “slow coming in right now.”
EAF steelmaking ramps up
The transition to electric-arc furnace steelmaking is now the center of Algoma’s operating strategy. The first EAF is running 24/7. The second remains on schedule, according to an earnings presentation, with the fume treatment plant built, doghouse walls poured, and tilt table and furnace installed.
Marwah said the melt shop is delivering “stable metallurgical quality and process control” across plate and coil grades. Cumulative investment reached CA$920 million at year-end, with the final project cost still expected at CA$987 million.
Scrap sourcing is ramping smoothly, executives said. Marwah noted “scrap availability and supply… is going pretty well.”
Strategic shift
Algoma highlighted a strategic shift towards defense-linked plate demand.
The company signed a binding MOU with Hanwha Ocean that includes up to US$250 million in potential value tied to structural steel development and submarine-program supply.
Marwah said the agreement signals Algoma’s “emerging role as a critical partner in Canada’s defense and industrial supply chain.”
As Canada’s only discrete plate producer, Algoma said it is shifting production towards plate while scaling back coil production. The domestic pivot inherently means less coil production, since coil was the bulk of its US-bound volume.
For 2026, Algoma expects total shipments to decline 29% to 41% year over year to 1.0 million to 1.2 million tons, with a roughly 50/50 split between plate and sheet.
“By concentrating on… plate products, along with selected coil products for the domestic market, we are optimizing for margin quality rather than volume” Marwah noted.
The company enters 2026 with a materially different footprint: no blast furnace, a fully running EAF, and a commercial strategy centered on domestic plate and selected coil products.
“We are evolving from a cross-border commodity producer to a Canadian-focused steel supplier at lower cost, lower emissions, and greater long-term resilience,” said Marwah.
