Algoma Steel reported a first‑quarter 2026 net loss of $159.4 million , far worse than the $24.5 million loss a year earlier, as the company completed its conversion to an electric‑arc furnace (EAF). The transition coincided with a steep drop in steel shipments and a rise in tariff expenses, prompting the firm to lean on new defence and overseas partnerships for future growth.

EAF transition drives net loss to $159.4 million

The shift to an EAF‑only production line was the primary catalyst for the widened loss, according to the company’s financial release. Direct tariff costs rose to $27.4 million,yet the overall revenue decline outweighed any savings from lower blast‑furnace operating costs.

Shipments plunge 52% to 223,681 tons

Algoma’s steel shipments fell to 223,681 tons in Q1 2026, compared with 469,731 tons in the same period last year, reflecting the reduced capacity of the new furnace setup. The CEO called the quarter a “turning point” after the blast furnace was shut down on January 18.

Tariff costs rise to $27.4 million amid export shift

Even as the firm trimmed its exposure to the U.S. market—export share dropped from over 50% to about 28%—direct tariff expenses more than doubled, climbing to $27.4 million from $10.5 million a year earlier. The company said it is now focusing on the Canadian plate market while limiting exports to mitigate the harsher tariff environment.

Strategic tie‑ups with Roshel and Hanwha Ocean

Algoma highlighted two new strategic relationships: a defence‑sector partnership with Canadian‑owned Roshel and a memorandum of understanding with South Korea’s Hanwha Ocean. Both deals are intended to diversify revenue streams as the steelmaker repositions itself after the EAF conversion, according to the press release.

Who will fund the 2026 expense reductions?

The CFO noted that transition‑related expenses are expected to fall later in 2026,but the source did not disclose the exact financing plan. Questions remain about whether capital expenditures, cash reserves, or external financing will cover the anticipated cost cuts.