Canadian steel producer Algoma Steel has provided its financial and operational guidance for the first quarter ended March 31, 2026. The producer stated that total steel shipments for the period are expected to reach approximately 220,000 mt, while adjusted EBITDA is projected to range between negative $25 million and negative $35 million.
The company indicated that the expected adjusted EBITDA includes a capacity utilization adjustment of $90-95 million, reflecting excess fixed costs incurred during the quarter as production volumes remained below optimal levels amid the ramp-up of its electric arc furnace (EAF) operations.
EAF transition drives cost pressure despite structural benefits
According to Algoma Steel, the negative EBITDA outlook is primarily linked to the transition phase following the commissioning of its electric arc furnace. The company highlighted that lower production volumes during the ramp-up period have led to underutilization of capacity and elevated fixed costs.
As stated by Algoma Steel’s CEO Rajat Marwah, the first quarter of 2026 represents a key milestone in the company’s operational transformation. He noted that the shutdown of blast furnace and coke oven operations has been completed, marking a full transition to EAF-based steelmaking following an investment of nearly $1 billion.
Algoma Steel stated that, while near-term demand softness continues to weigh on shipment volumes, the structural cost improvements inherent to EAF-based steelmaking are expected to drive meaningful sequential improvement in adjusted EBITDA.
All figures are in Canadian dollars unless specified otherwise.