Steel Mills

Winter Weather Slows Q3 Production for Essar Steel Algoma

February 13, 2014

Essar Steel Algoma posted a net loss of 38.6 million for the third quarter FY 2014, ending December 31, 2013, compared to a net loss of $25.1 million for third quarter FY 2013.

Severe winter weather slowed incoming raw material shipments affecting production for the quarter. Steel shipments were 590,837 tons, down from 642,000 tons the prior quarter and down 9.9 percent from the same period a year ago. Sales of $436 million dropped 6 percent from Q2 due to lower production and margins.

The average selling price per ton was higher in the Q3, $666/ton versus $638/ton the prior quarter.

The outlook for 2014 is positive with an Algoma trade action against imported plate helping to recover pricing by $70/ton. Total shipments for FY 2014 are expected to be in the range of 2.4 to 2.5 million tons.

“We are encouraged by improving macro economic indicators for 2014 as demonstrated in recent increases to hot rolled coil pricing and a significant improvement in the pension solvency position. In the months ahead we expect reduced costs as benefits from our new iron ore contract materialize,” said CEO Kalyan Ghosh. When combined with the recent strategic additions to our management team and plans to improve productivity by a further 10-15% we are confident in our ability to realize a further $50 per ton cost reduction over the coming quarters.”