Algoma Steel incurs $10.5 M in tariff-related costs during 1st quarter

Algoma Steel incurred $10.5 million in tariff-related costs in the first quarter of 2025.

But CEO Michael Garcia says the company, which is the largest employer in the northern Ontario city of Sault Ste. Marie, remains in a good position despite American tariffs on Canadian steel.

"We recently announced our participation in team vigilance, strengthening our position in the Canadian defence supply chain, and we are encouraged by the federal government's renewed focus on domestic military procurement and infrastructure spending, which we believe will support future demand for our plate products," he said during a shareholder meeting on Wednesday.

In March, U.S. President Donald Trump imposed a 25 per cent tariff on Canadian steel and aluminum.

In its quarterly update to shareholders, Algoma Steel said U.S. tariffs could mean a lot more Canadian steel on the market on this side of the border, which would mean a drop in prices and could hurt the Sault mill's bottom line.

Algoma Steel reported its consolidated revenue for the quarter was $517.1 million, down from $620.6 million in the prior-year quarter. 

The company said the decline was mainly due to the drop in steel prices amid weakening market conditions.  

Algoma Steel also had a net loss of $24.5 million for the quarter, compared to net income of $28 million in the same quarter last year.

"Our financial and operational results were broadly in line with expectations, despite headwinds from tariff uncertainty and subdued demand and pricing in the steel market," Garcia said in a news release.

In its update to shareholders Algoma Steel said steel production using its new electric arc furnace is expected to start sometime this spring.

The company has invested $823.6 million to build the furnace, which is expected to cut emissions by 70 per cent.