Algoma Metal foresees challenges, alternative from commerce struggle as it really works to chop prices

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The chief government of one among Canada’s largest metal producers says the corporate is in discussions with federal and provincial leaders to find out what authorities help is likely to be out there to assist offset the Trump administration’s tariffs.

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Algoma Metal Group Inc. CEO Michael Garcia mentioned Thursday his firm expects the Canadian authorities’s “swift and applicable response” will help the business because it weathers the influence of tariffs.

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However he mentioned Algoma is already within the midst of “aggressive” price cuts because it copes with the fallout of the continued commerce struggle.

“The implementation of tariffs on Canadian metal and aluminum imports has launched much more uncertainty into the North American metal market,” Garcia instructed analysts as the corporate reported its newest quarterly outcomes.

“Given the deeply built-in North American provide chain, we imagine rational dialogue will prevail between these two shut allies, restoring regular metal commerce between Canada and the U.S.”

This week’s occasions painted a extra turbulent image, nonetheless.

A day earlier than U.S. President Donald Trump’s metal and aluminum tariffs — a 25 per cent levy on all American imports of every materials — had been to kick in Wednesday, he threatened to slap Canada with double these levies. Trump mentioned that was in response to Ontario implementing a 25 per cent surcharge on power exports to the U.S.

The day ended with Ontario Premier Doug Ford backing off from the export tax, and Trump’s 25 per cent tariffs on Canadian metal and aluminum coming into drive Wednesday.

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Canada countered Trump’s transfer with 25 per cent tariffs on $29.8 billion value of American items, which took impact simply after midnight Thursday.

The federal authorities additionally mentioned it would prioritize investments in initiatives that primarily use Canadian metal and aluminum as a part of its response.

The help might come too late for some. Final week, 30 employees had been laid off at Ivaco, a steelmaker within the jap Ontario village of L’Orignal, United Steelworkers mentioned.

It added that one other spherical of layoffs is ready to start.

“At present, greater than 120 folks acquired notices of short-term, one-week layoffs to start subsequent week,” the union mentioned in a press release Wednesday.

“The corporate has indicated the tariffs and lack of orders are why we’re getting these job losses and work disruptions,” mentioned Eric Fournier, president of the union native representing 225 employees in Ivaco’s rod mill — one among three firm mills in L’Orignal _ together with the 120 affected workers.

Ivaco, Canadian-owned till 2004, has been run for the final 20 years by American aerospace and electronics firm Heico Corp.

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Garcia mentioned that though he expects the tariffs to pose a “vital problem” for Algoma, the corporate might have a chance to extend gross sales within the home market as Canadian imports of U.S. metal decline.

He mentioned about 3.5 million tonnes of U.S. metal have entered the Canadian market over the previous 12 months.

“That offers us an excellent alternative with the tariffs that the Canadian authorities introduced (Wednesday) to exit and seize extra market share and extra plate gross sales in Canada,” mentioned Garcia, noting Algoma had been in discussions with potential consumers for the reason that tariffs kicked in.

“To the extent that the defence spending and shipbuilding begins to ramp up within the Canadian market, we see that as an excellent alternative, particularly if the federal government implements ‘purchase Canadian’ necessities for that construct.”

On Wednesday, the Sault Ste. Marie, Ont., firm reported a internet lack of $66.5 million in its newest quarter ended Dec. 31, in contrast with a lack of $84.8 million a yr earlier. Its internet loss per diluted share was 61 cents, down from a internet lack of 78 cents per share throughout the identical interval the earlier yr.

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Garcia mentioned the consequence mirrored “the continued difficult circumstances throughout international metal markets, notably on account of tariff uncertainty, which led to decrease realized costs in the course of the quarter.”

Along with commerce struggle tensions, he mentioned metal pricing and prospects’ shopping for behaviour had been additionally affected by U.S. election uncertainty and rate of interest issues.

“Softer realized metal costs and better prices greater than offset increased shipments, resulting in an total decline in revenues,” mentioned Garcia.

This report by The Canadian Press was first revealed March 13, 2025.

Firms on this story: (TSX:ASTL)

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