Algoma EAF to start in April

The CEO of the Sault Ste. Marie, Ontario-based Algoma Steel Group says the company will begin producing steel from its newly installed electric arc furnace (EAF) system this April.

“After years of planning and construction, I'm thrilled we are rapidly approaching the first arc in furnace one, with first steel production still expected in April,” Algoma CEO Michael Garcia says in comments accompanying the release of the firm’s most recent financial results.

The Algoma board of directors voted to convert the firm’s Sault Ste. Marie from blast furnace/basic oxygen furnace (BF/BOF) technology to higher recycled-content EAF production in late 2021.

At the project site, Algoma says “record days of snowfall” in late 2024 had an impact on the project’s schedule, “but the team has been working hard on mitigating these impacts and, as a result, the company now expects first steel production in April 2025.”

In its most recent press release, the company says, “Following the transformation to EAF steelmaking, Algoma’s facility is anticipated to have an annual raw steel production capacity of approximately 3.7 million tons, matching its downstream finishing capacity, which is expected to reduce the company’s annual carbon emissions by approximately 70 percent.”

In a section of its earnings release subtitled “Potential Tariff Impact,” the company portrays the on-and-off recent history of United States President Donald J. Trump’s 25 percent tariff on Canada-made steel shipped to the U.S. “The company is currently assessing the impact of these tariffs and tariff threats, Algoma says, adding, “The tariffs are expected to have a material and adverse impact on the company’s financial position, results of operations and liquidity; however, an estimate of the financial impact cannot be made at this time.”

Garcia says, “We remain confident that the Canadian federal and provincial governments will respond swiftly and appropriately to support the industry. Given the deeply integrated North American supply chain, we believe rational dialogue will prevail between these close allies, restoring normal steel trade. While these tariffs 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.”

A February Canadian Broadcasting Corp. (CBC) online article quotes a union officer representing some workers at Algoma as saying the mill sends about half of its steel shipments across the border to the U.S. This Wednesday, Reuters reported that Algoma had temporarily halted all such exports to the U.S. while seeking clarity on tariffs.

As Algoma has been installing its EAF it has continued operating some of its BOF capacity to maintain cash flow and serve its customers.

In the financial quarter ending Dec. 31, 2024, (the third quarter of the firm’s 2024 fiscal year), Algoma says it lost CA$66.5 million ($46.1 million), marking a 21.6 percent smaller loss compared with one year earlier.

CEO Garcia frames it as a solid performance in difficult circumstances. “The entire Algoma team executed extremely well during our calendar fourth quarter,” he remarks. “Despite ongoing macroeconomic uncertainty and tariff-related issues driving prices below production costs for much of the industry, we've maintained unwavering focus on two critical priorities: safely operating our existing facilities and progressing our transformative EAF project.”

Regarding the EAF conversion project nearing completion, Garcia says, “We reach this milestone amid turbulence in the North American market, as evolving tariffs on Canadian steel and aluminum imports add further uncertainty.”

He concludes, “We are about to enter the transition phase of the project, with rising steel production from the EAF augmenting output from our traditional blast furnace operations on the way to processing all of our steel through the EAFs around the end of 2026.”

Garcia says 2025 “marks the beginning of a new chapter where Algoma begins its journey to become one of the greenest producers of steel in North America while creating lasting value for all stakeholders, and we couldn’t be more excited for what the future holds.”