Algoma Steel Group Inc. has announced its financial results for the first three months of this year. The company reported a consolidated net loss of C$159.4 million for the first quarter, compared with a net loss of C$24.5 million in the prior-year quarter. Revenue totaled C$296.9 million, down from C$517.1 million a year earlier, while loss from operations widened to C$153.5 million from C$139.9 million. Comparisons were significantly impacted by the transition from legacy blast furnace operations to the company's new electric arc furnace (EAF) platform and a materially more adverse tariff environment.
On January 18, 2026, Algoma permanently ceased production at its blast furnace and associated coke batteries, ending 125 years of coal-based integrated steelmaking. The first quarter of 2026 was the first full quarter in which all liquid steel production came from the new EAF facility. The Unit One EAF and melt shop are running on a 24-hour schedule, and construction of the second EAF unit is nearing completion, with steel production expected in the third quarter of 2026. Once fully transitioned, Algoma's facility is expected to have annual raw steel capacity of approximately 3.7 million tons and to reduce carbon emissions by about 70 percent from pre-EAF levels.
CEO Rajat Marwah described the quarter as "a genuine turning point" for the company, noting that the EAF is running around the clock and the plate mill is producing Volta low-carbon steel at scale. Algoma is concentrating its commercial strategy on discrete plate, where it holds a unique competitive position as Canada's only producer, while scaling back coil output to align with domestic market conditions. Plate sales reached a record 116,000 net tons in the quarter, and the company expects plate production to increase sequentially as the EAF ramp-up continues through 2026.
The US’ 50 percent tariff on Canadian steel under Section 232 continued to define the operating landscape, with direct tariff costs of C$27.4 million in the first quarter of 2026, up from C$10.5 million a year earlier. Shipments to the US accounted for 28 percent of total steel volumes, compared with the historical range of 45 to 55 percent.
All of this yielded first-quarter shipments declining 52.4 percent year on year to 223,681 tons, from 469,731 tons in the first quarter of 2025. This is reflective of the move to EAF-only steelmaking and a deliberate pivot toward the Canadian plate market. Adjusted EBITDA was a loss of C$28.7 million, including a C$90.2 million capacity utilization charge, compared with an Adjusted EBITDA loss of C$46.7 million in the year-earlier period. Adjusted EBITDA margin was negative 9.7 percent versus negative 9.0 percent. Average net sales realization per ton of steel sold rose to C$1,193 from C$986, while cost per ton increased to C$1,180 from C$1,137.
Second quarter has started with an announcement of the formation of Roshel Algoma Defence, a joint venture with Roshel Inc. to establish a Canadian Centre of Excellence for Ballistic Steel Production. The previously announced binding memorandum of understanding with Hanwha Ocean Co. Ltd. remains in effect, carrying an aggregate potential value of US$250 million, comprising a US$200 million contribution toward the potential development of a structural steel beam mill and up to US$50 million in anticipated product purchases related to the Canadian Patrol Submarine Project.
Looking even further ahead, Algoma pointed to several directional expectations. CFO Michael Moraca said the C$90.2 million capacity utilization charge is expected to decline sequentially and be eliminated by the fourth quarter as the EAF ramps up, with incremental improvement in financial results anticipated in the quarters ahead as EAF Unit 1 continues ramping and EAF Unit 2 is commissioned. Plate production is expected to increase sequentially through 2026, while the 50 percent under US Section 232 tariff is treated as an ongoing condition with no specific outlook or resolution. With capital expenditures down sharply from the EAF construction peak, the company expects to redirect financial resources toward strategic growth opportunities.