Canada-based Algoma Steel Group Inc. has announced a net loss of CAD$96.0 million for the second quarter of 2026, compared to a net loss of CAD$110.6 million in the second quarter of 2025, an improvement of 13 percent. Revenue for the second quarter was CAD$267.5 million, compared to CAD$589.7 million in the second quarter of 2025. The company's adjusted EBITDA for the second quarter was CAD$13.8 million, compared to an adjusted EBITDA loss of CAD$32.4 million in the second quarter of 2025.
The loss was driven primarily by sharply lower steel shipments, as US Section 232 tariffs continued to restrict the company's historical export business. Loss from operations widened to CAD$134.2 million from CAD$85.1 million in the second quarter of 2025. The net loss nonetheless narrowed year over year, helped by CAD$45.0 million in insurance proceeds and a foreign exchange gain.
Second quarter adjusted EBITDA includes two notable one-time items. A final insurance settlement of CAD$45.0 million was recognized in other income, related to the January 2024 structural utility corridor collapse, settled in full at CAD$145.0 million net of deductibles. Additionally, a capacity utilization adjustment of CAD$54.7 million is included, representing excess fixed costs carried beyond what was required to operate the electric arc furnace (EAF) at current volumes. That adjustment declined from CAD$90.2 million in the first quarter of 2026.
Shipments totaled 181,473 tons in the second quarter, a decrease of 61.6 percent year over year from 472,056 tons, reflecting the transition to EAF-only steelmaking after legacy blast furnace operations were permanently halted on January 18, 2026. Average net sales realization per ton of steel sold rose to CAD$1,361, an increase of 20.2 percent year over year from CAD$1,132 per ton. Cost per ton of steel products sold was CAD$1,411, compared to CAD$1,144 in the second quarter of 2025. Shipments to the US represented 23 percent of total steel shipments, compared to 54 percent in the second quarter of 2025 and a historical range of approximately 45 to 55 percent. Direct tariff costs were CAD$18.7 million, down from CAD$64.1 million in the second quarter of 2025.
For the third quarter of 2026, Algoma expects first steel production from its second EAF unit, with construction nearing completion. The capacity utilization adjustment is expected to decline further over the next three months and be fully eliminated by the fourth quarter of 2026. Following completion of the EAF transformation, the facility is expected to have annual raw steel production capacity of approximately 3.7 million tons and to reduce annual carbon emissions by approximately 70 percent from pre-EAF levels. The company ended the quarter with total available liquidity of approximately CAD$437 million.
Rajat Marwah, Algoma's chief executive officer, said, "The second quarter demonstrated the resilience of our transformed business against a stubbornly challenging industry backdrop. We delivered a second consecutive quarter of record plate sales, our first EAF unit continued to ramp up as expected, and transition costs declined meaningfully from the first quarter. With commissioning activities commencing at the second EAF unit and first steel expected in the third quarter, we are entering the final phase of the most significant transformation in Algoma's history."
Mr. Marwah continued, "While the 50 percent US Section 232 tariffs continue to effectively foreclose our traditional access to the US market, our pivot to a Canada-centric, plate-first strategy is working. As Canada's only producer of discrete plate, we are uniquely positioned to serve growing infrastructure, construction, and defense demand, and the recent rise in steel prices is encouraging. We are grateful for the continued support of the federal and provincial governments as we complete this transition and build a stronger, more sustainable Canadian steel industry."
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