Algoma Board OKs Two New EAFs, Startup Set for '24

“We believe that today’s strategic decision to transition Algoma to electric arc steelmaking represents a win for all of our stakeholders,” Algoma CEO Michael McQuade said in a statement on Thursday, Nov. 11.

“It is designed to transform Algoma into a more agile and profitable company, positioned for long-term growth as an economic driver and employer of choice in our community,” he added.

The switch to the EAF route, which will lower Algoma’s CO2 emissions by an estimated 70% (3.3 million tons per year), also depends on more electricity becoming available, the company said.

Algoma said it would in addition add new vacuum degassing capability so that it could make a wider range of plate products. The company make makes hot-rolled and cold-rolled coil as well as plate.

Lower CO2 emissions aren’t the only benefit of EAF steelmaking. Algoma expects lower conversion costs, lower carbon tax liabilities and lower maintenance spending compared to traditional integrated steelmaking.

The company also expects that the EAF route will allow it the flexibility to match production to market conditions. And having two EAFs will reduce the risk of a single furnace failing – something Algoma is currently exposed to.

Algoma has two blast furnaces: The No. 7 has daily capacity of 8,400 tons of iron. The No. 6 has capacity of 3,000 tons of iron per day but is idle, according to SMU’s blast furnace status table.

The company announced in May that it planned an IPO, proceeds of which could be used to fund its transformation to EAF production. That IPO occurred last month, and the company has since announced a joint venture with scrap recycler Triple M Metal to source prime scrap and other iron units for its EAFs.

Algoma is hardly alone in switching to the EAF route or adding new EAF capacity. New EAFs have been announced or are being considered across North America – and around the world. That has raised concerns about a potential shortage of prime scrap in coming years should supplies of the raw material fail to keep pace with a big projected increase in demand.

By Michael Cowden, Michael@SteelMarketUpdate.com