Steel Mills
Essar Steel Algoma in Financial Straits
Written by Sandy Williams
November 4, 2015
Recent media reports indicate that Essar Steel Algoma may be heading for another return to insolvency as it struggles to meet its debts. According to media reports, the company has engaged a law firm and restructuring specialist to advise it and may file for insolvency by the end of the month.
Although Essar Steel Algoma has not confirmed the reports, spokesperson Brenda Stenta at Essar Steel Algoma provided SMU with the following statement.
“With regards to the current situation, we are operating our business as always with a focus on delivering the best quality product to our customers and the health and safety of our employees,” wrote Stenta.”
“Recent staff layoffs reflect difficult times in the international and domestic steel business overall. World steel prices have fallen dramatically over the past year as a result of overcapacity and reduced demand in the energy and mining sectors. In Canada, this pressure has been increased by the proliferation of low-priced steel flooding the market.”
The company laid off 100 employees last month at its plate and cold mills. Last week, salaried workers from USW Local 2742 were asked to vote on a work-share proposal that would allow two employees to share a job, avoiding complete job loss. Workers rejected the proposal in a 77-23 vote.
When Essar Steel Algoma was under court protection in July 2014, parent company Essar Global stepped in to provide funding. Soo Today reports that Essar Group has a plan to sell a 50 percent stake in Essar Oil to provide financing for its ailing steel segment abroad and in Canada. It is not confirmed that Essar will divert any of the funds of that sale to Algoma.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Ternium swings to Q3 loss, eyes 2026 recovery
Ternium closed the third quarter with steady shipments and improving margins. But trade policy uncertainty and subdued demand in Mexico weighed on the Latin American steelmaker’s results.
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.
Cliffs, POSCO announce MoU for ‘transformative’ partnership
Cleveland-Cliffs on Thursday said it had signed a memorandum of understanding (MoU) with POSCO to forge a strategic partnership, one Cliffs bills as "transformative."
Cliffs touts steel stamping solution to replace aluminum in automotive
Cliffs said it successfully completed a defect-free trial production of exposed steel parts using aluminum-forming equipment in collaboration with an unnamed OEM,
Nucor navigates mixed flat-rolled markets with strategic muscle
Nucor entered the fourth quarter with clear forward momentum: stronger-than-expected results, solid sheet and plate demand, and construction progress on a major new mill that should add capacity next year.