Algoma Steel Group Reports Q1 2026 Results After Transition to Electric Arc Furnace

Algoma Steel Group released its first-quarter 2026 financial results on Wednesday following the completion of its shift to electric arc furnace steelmaking. The company permanently halted blast furnace operations on January 18, ending 125 years of coal-based integrated steel production at the site.

The move also concluded more than 50 years of output from its No. 7 blast furnace, which produced over 100 million tonnes of liquid iron during its lifetime. In the earnings call, Chief Executive Officer Rajat Marwa described the change as a transformation that establishes the foundation for the company's future operations.

The Unit One furnace and associated melt shop have performed as designed, achieving quality metrics across plate and hot rolled coil grades on a 24-hour schedule. Adjusted EBITDA for the quarter showed a loss of C$28.7 million. The company said this result was broadly consistent with the prior quarter when adjusted for capacity utilization impacts and insurance proceeds.

Performance during the transitional quarter was supported by a shift toward higher-value plate products, with record plate sales of 116,000 net tons. Net sales realization improved as a result of this deliberate mix shift. Algoma anticipates a return to profitability by Q4 2026 as electric arc furnace production scales, operational stability increases and remaining transition costs are eliminated.

The company said it views the first quarter as the EBITDA trough.

Algoma announced a joint venture with Rochelle Inc. focused on ballistic steel production. The company also entered into a significant memorandum of understanding with Hanwha Ocean. Management highlighted these developments as reinforcing Algoma's role in Canada's defense sector.

The company remains Canada's only independent steelmaker. The 50 percent U.S. Section 232 tariff on steel imports from Canada resulted in C$27.4 million in direct costs during the quarter, down from the prior period as shipments to the U.S. were reduced.

steel in the market. The company said demand for infrastructure, construction and defense end markets remains healthy. It expects volume and cost improvements as electric arc furnace output increases.

Algoma stated that its facilities continue to provide liquidity support. Management said it is focused on reducing cash burn as production scales. The earnings presentation and additional details from the call are available in the investors section of the company's corporate website.

The full transcript and replay will also be accessible there. Rajat Marwa said the electric arc furnace platform is now producing low-carbon steel at scale. He added that pricing resilience and an improved cost structure form the basis for a return to profitability.