Algoma Steel Group Inc. reported a net loss of $159.4 million for the quarter ending March 31, a sharp increase from the $24.5 million loss in the same period last year. The Sault Ste. Marie, Ontario-based company attributed the widening loss to ongoing U.S. tariffs on steel imports, which cost the company $27.4 million directly in the quarter. CEO Rajat Marwah said the tariffs have fundamentally altered the company’s operating landscape, prompting a strategic pivot away from cross-border commodity production.

The $27.4 Million Tariff Toll

Algoma Steel’s direct tariff costs amounted to $27.4 millon in the latest quarter, according to the report. while this figure represents a decrease from previous quarters, it remains a significant burden as the company continues to reduce its shipments to the U.S. The tariffs have forced Algoma to rethink its business model, with Marwah emphasizing the need to adapt to a more challenging trade environment.

A 52.4% Drop in Shipments

The company’s steel shipments plummeted by 52.4% year-over-year, falling to approximately 224,000 tons in the first quarter. This decline reflects Algoma’s deliberate shift away from the U.S . market, where tariffs have made operations increasingly difficult. Marwah noted that the company is now focusing on strengthening its domestic presence, particularly in defence-related steel production.

Partnering with Roshel for Defence Solutions

As part of its strategic repositioning, Algoma Steel has partnered with Roshel Inc., a defence manufacturer, to form Roshel Algoma Defence.. This new venture aims to focus on steel defence solutions in Canada, marking a significant departure from the company’s traditional role as a cross-border commodity producer. Marwah highlighted this partnership as a key step in Algoma’s efforts to mitigate the impact of U.S. tariffs and secure a more stable future.

Unanswered Questions About Long-Term Viability

While Algoma Steel’s pivot to defence contracts is a promising development, questions remain about the long-term viability of this strategy. The company has not disclosed specific details about the expected revenue from its partnership with Roshel, nor has it provided a clear timeline for when it expects to return to profitability. Additionally, the broader economic impact of U.S. tariffs on the Canadian steel industry remains uncertain , leaving Algoma and its peers in a precarious position.