en.Wedoany.com Reported - Canadian recycled-content steel producer Algoma Steel Group Inc. has issued its guidance for the second quarter of fiscal 2026, projecting adjusted EBITDA between $3.5 million and $10.5 million, while steel shipments are expected to decline significantly.
The company expects total steel shipments of 175,000 to 180,000 tons for the quarter ending June 30, 2026. This represents a decrease of approximately 20% from the previous quarter and a decline of over 60% compared to the second quarter of 2025. Algoma has invested this decade to replace its blast furnace/basic oxygen furnace (BOF) steelmaking capacity with a recycled-content electric arc furnace (EAF) system. However, just as its EAF capacity begins to ramp up, the company's access to the U.S. market has been restricted by import steel tariffs imposed by the United States.
Algoma stated that the adjusted EBITDA figure "includes a $31.6 million final insurance settlement gain related to the January 2024 coking utility corridor incident, as well as expected capacity utilization adjustment gains of approximately $35 million to $38 million." These adjustments largely represent the difference between profit and loss for the steelmaker.
CEO Rajat Marwah expressed optimism about the outlook. He said: "The second quarter of fiscal 2026 demonstrates the continued resilience of our transformed business, achieving record plate sales, while our first EAF continues to ramp up as expected, even as broader market conditions continue to pressure total shipments." Marwah added that the company looks forward to bringing its second EAF into operation in the second half of this year and beginning its ramp-up to full expected capacity, completing the transformation.
Regarding trade policy and the company's response strategy, Marwah said: "While tariffs remain a structural headwind, we continue to make significant progress in shifting toward a more Canada-centric strategy, and the recent increase in steel prices is encouraging. As Canada's only discrete plate producer, we remain well-positioned to meet growing infrastructure, construction, and defense demand."
