Canadian steelmakers report mixed results

Two different Canadian steelmakers have reported financial results for this year’s second quarter, with both Sault Ste. Marie, Ontario-based Algoma Steel Group Inc. and Hamilton, Ontario-based Stelco Holdings Inc. indicating their net incomes were lower compared with a year ago.

Algoma's net income of CAD$130.9 million ($97.5 million) represents a 56 percent drop compared with the CAD$301.4 million ($224.4 million) it earned 12 months previously.

The period from April 1 to June 30 is the first quarter in Algoma’s fiscal year, and the company's revenue also dropped in its fiscal year 2024 first quarter compared with one year previously, although by a more modest 11.4 percent.

Algoma also has reported continuing progress on its installation of two new scrap-fed electric arc furnaces (EAFs) to replace its existing blast furnace and basic oxygen steelmaking operations.

“The project timing and budget remain consistent with the outlook provided in the fiscal fourth quarter 2023 earnings release,” the firm says. At that time, Algoma targeted mid-2024 as the likely startup dates for its EAFs.

“Following the transformation to EAF steelmaking, Algoma’s facility is expected to reach an annual raw steel production capacity of approximately 3.7 million tons, matching its downstream finishing capacity, and to generate an approximate 70 percent reduction in the company’s annual carbon emissions," Algoma says.

"We expect to fund the remainder of the project with a combination of cash on hand, availability under our federal Strategic Innovation Fund loan, drawdown of excess working capital, and expected cash flows from operations," Algoma CEO Michael Garcia adds. "We are uniquely positioned to simultaneously deliver strong financial results from our existing portfolio while advancing towards EAF commissioning, expected at the end of 2024.”

Stelco, which relined and restarted a blast furnace just three years ago, has reported second quarter adjusted net Income of CAD$123 million ($91.6 million), which is down 65 percent from the second quarter of 2022 but up more than 1,130 percent from this year’s first quarter.

“The improvement over last quarter is a direct result of our ability to take advantage of our industry leading low-cost position and to effectively deploy our tactical flexibility business model," Stelco CEO Alan Kestenbaum says.

“During the second quarter we experienced relief from certain of the inflationary pressures that have impacted our costs over the last several quarters and benefited from a more normalized market with stabilized price levels and lead times.”