Earnings Material −

Algoma Steel Group Inc. Provides Guidance for the Second Quarter 2026

Q2 underlying EBITDA nosedives despite insurance boost; shipments miss 'slightly lower' pledge.

By The Northwire Desk — AI Analysis Jun 30, 2026 · 17:30 ASTL · 5.78 ALGOMA STEEL GROUP INC.

Executive Summary

Algoma issued preliminary guidance for Q2 2026 (quarter ending June 30, 2026) on the last day of the quarter.
Total steel shipments projected at 175,000–180,000 net tons, a further sharp contraction.
Adjusted EBITDA expected at $5–15 million (CAD), but this figure is inflated by two one‑time items: a $45 million insurance settlement and a $50–55 million “capacity utilization adjustment benefit.” Without those, underlying Adjusted EBITDA would be a loss of roughly $85–90 million.
Operational commentary highlights record plate sales, continuing ramp‑up of EAF Unit 1, and an on‑schedule second EAF unit for H2 2026.
Management calls tariffs a “structural headwind,” notes recent steel price rises as encouraging, and emphasizes Canada‑centric strategy focusing on discrete plate for infrastructure, construction and defense.

Material Impact

The Q2 guidance reveals materially worse underlying operating performance than the market would have inferred from the prior “slightly lower volumes” comment. Underlying EBITDA (ex‑one‑time benefits) is estimated at a loss of ~$85–90M, a dramatic deterioration from Q1’s adjusted EBITDA loss of $28.7M.
The reliance on a $45M insurance gain and a $50–55M capacity utilization adjustment to report positive headline EBITDA masks the core erosion.
Shipments of 175–180k tons set a new post‑transition low, confirming that the EAF ramp‑up has not yet translated into stable volume recovery and that coil oversupply remains acute.
The news reinforces a deeply negative trend already reflected in the sharp share price decline from ~$8 to $5.74, but the severity of the volume miss and the quality of the EBITDA make this a genuinely negative new data point.
Rating: Material – Negative.

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Company Overview

Algoma Steel is a Canadian independent integrated steel producer, historically using blast‑furnace/BOF technology but now fully transitioned to electric arc furnace (EAF) steelmaking. It operates a single site in Sault Ste. Marie, Ontario, with plate and hot‑rolled coil finishing mills. It is Canada’s only producer of discrete plate and aims to serve domestic infrastructure, construction, and defense demand. The transformation to EAF is projected to cut carbon emissions by ~70%.

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