Algoma Steel expects to break even in fiscal third quarter

Algoma Steel is still feeling the residual impacts of last year’s auto workers strike in the U.S.

The Sault Ste. Marie steel plate and sheet company reported a soft order book this past fall in a Jan. 3 preview of its upcoming third-quarter results. Algoma's third quarter ended on Dec. 31.

Fiscal 2023 third quarter steel shipments are expected to be 515,000 tons, down from 548,998 tons the previous quarter. Quarterly earnings are expected to be in the range of losing $10 million or breaking even.

Algoma CEO Michael Garcia is confident of better days ahead in 2024.

“Due to the lagging nature of our order book, UAW strike-driven soft demand and pricing in the previous quarter and through October impacted our fiscal third quarter results,” said Garcia in a news release.

“In October, steel pricing began to recover in anticipation of a strike settlement, and since the strike’s end pricing has continued to improve, currently sitting near 12-month highs. We expect this pricing strength, coupled with continued solid market fundamentals, to drive significantly improved realized pricing and overall fiscal results starting with our fiscal fourth quarter.”

Garcia continues to tout process on Algoma's $800-million electric arc furnace construction, saying it’s on budget with costs basically unchanged at the end of the quarter. Commissioning of the two furnaces begin in 2025.

“Our operations ran in line with our expectations during the fiscal third quarter, with a heavy focus on seasonal maintenance that included completion of our annual basic oxygen furnace relining and other servicing across the steelworks," added Garcia.