The top executive of Algoma Steel says his company stands to benefit form increased pricing amid a trade war with the U.S., highlighting opportunities within the steel plate segment.
Ottawa moved Wednesday on reciprocal dollar-for-dollar tariffs on U.S. steel and aluminum imports, responding to U.S. President Trump’s 25 per cent tariffs on steel and aluminum. The countermeasures came into effect shortly after midnight Thursday.
In an interview with BNN Bloomberg Thursday, Algoma Steel CEO Michael Garcia said the company may benefit from increasing pricing amid the trade war. However, he said he wishes the gains were based on “economic growth and real drivers of steel demand rather than uncertainty around tariffs and people laying in larger inventory or securing more steel because they weren’t certain what was going to happen with tariffs.”
“But nevertheless, increasing pricing has benefited us and more importantly, what’s happening in the Canadian steel market is very important with the announcement yesterday of the Canadian government’s tariff on U.S. steel imports, that’s very important to us,” he said.
Specifically, Garcia highlighted that Algoma is the only producer of steel plate in Canada, adding that last year, the U.S. supplied more steel plate in Canada than Algoma.
“So we have a tremendous opportunity in our plate business to pick up more of the Canadian market and serve Canadian customers with steel plate,” he said.
Garcia said steel plate is used for things like infrastructure projects, large construction equipment as well as ship building.
He also said the Canadian steel industry is lacking stipulations to buy Canadian.
“I hope truly that there are by Canadian stipulations in all this future defence or icebreaker spending that the government is ready to pursue. If there’s a bridge in Canada being built anywhere, I want it to be built with Canadian steel, and I want preferences written in,” Garcia said.
“For years now, there’s been a preference if something is being built in the U.S. using large amounts of government money, they have buy U.S. stipulations in their steel procurement for those infrastructure projects. Canada has never had that, we still don’t have it and I think we should.”
Earlier this week, Algoma Steel moved to lay off more than two dozen workers while reporting fourth quarter earnings that same day. The company reported a net loss of $66.5 million, from a net loss of $84.8 million a year earlier.
“The tariffs are expected to have a material and adverse impact on the Company’s financial position, results of operations and liquidity; however, an estimate of the financial impact cannot be made at this time,” the company said in a press release Wednesday.
