Algoma resumes steel shipments to US, sees opportunity in tariffs

The resumption of shipments follows a meeting held between Canadian and US officials in Washington, D.C., on Thursday.

The spokesperson provided no further information on the substance of that meeting.

In its earnings results on Wednesday, Algoma said that US tariffs would hurt its “financial position,” though no estimate was given by how much.

Opportunity with tariffs?

On an earnings call on Thursday, Algoma CEO Michael Garcia noted that “tariff uncertainty” led to lower realized prices during the fourth quarter. He also said “soft demand and the tariff trade war tensions” have influenced customers’ buying behavior.

“While we expect these tariffs to pose a significant challenge, we expect that our transition to EAF steelmaking will strengthen our cost structure and enhance our ability to navigate market uncertainties over the long term,” Garcia said.

The CEO said, however, that the Canadian government’s retaliatory tariffs could provide an opportunity, especially as Algoma is Canada’s only discrete plate producer.

Garcia pointed out that the Canadian market has shown different dynamics than the US market in the last couple of months.

“I would say it’s oversupplied with (hot-rolled) coil right now, and undersupplied with plate,” Garcia said, adding: “So the announcement by Canada … putting a tariff on US steel will help”

“There’s about 3.5 million tons of US steel in the Canadian market over the last 12 months,” he continued. “So that’s an opportunity for coil, but more so for plate to start moving up in price in the Canadian market.”