Algoma Steel's Q3 2025: Navigating Contradictions in Tariffs, EAF Timelines, and Insurance Payouts

These are the key contradictions discussed in Algoma Steel's latest 2025 Q3 earnings call, specifically including: Tariff Impact and Breakeven Prices, EAF Startup Timeline, and Insurance Payout Expectations:



Challenging Market Conditions:
- Algoma Steel reported adjusted EBITDA loss of $60.3 million for the fourth quarter of 2024, with cash used in operating activities at $76.9 million.
- The decline was due to lower realized steel prices, influenced by tariff uncertainty, interest rate concerns, soft demand, and trade war tensions, which affected customer buying behavior.

Plate Production and Shipments:
- Plate shipments for calendar Q4 2024 reached 82,000 tons, up from 73,000 tons in calendar Q3 2024.
- This increase was part of a strategic ramp-up to capitalize on Algoma's position as Canada's only discrete plate producer, with expectations for further growth in 2025.

Electric Arc Furnace (EAF) Project Progress:
- Algoma Steel is nearing completion of its EAF project, with first steel production expected in April 2025, marking a significant milestone in the company's transformation.
- The EAF project aims to enhance operational efficiency and reduce costs by transitioning from a blast furnace to this more modern steelmaking technology.

Cost Reduction and Operational Efficiencies:
- The company has been pursuing aggressive cost reduction plans to mitigate the impact of tariffs and market uncertainties, with a focus on optimizing operations and cost structures.
- Efforts include reducing variable costs and leveraging the EAF project to lower overall costs and strengthen the company's competitive position.

Financial Strength and Liquidity:
- Algoma Steel ended the year with $267 million in cash and a total liquidity position of $630 million.
- The strong financial position supports the company's ability to withstand market pressures and successfully execute the EAF project on budget and on schedule.