Financial Data and Key Metrics Changes - The second quarter results included an adjusted EBITDA loss of CAD 32.4 million, reflecting an adjusted EBITDA margin of negative 5.5% and cash used in operating activities of CAD 37.9 million [17][18] - The company finished the quarter with CAD 82 million in cash and CAD 329 million available under its revolving credit facility [17] - Net loss in the second quarter was CAD 110.6 million compared to net income of CAD 6.1 million in the prior year quarter, driven primarily by lower steel shipment volumes and lower realized pricing [20] Business Line Data and Key Metrics Changes - Plate shipments reached approximately 103,000 tons, up from 91,000 tons in 2025 and 82,000 tons in 2024, indicating a strategic focus on plate production [10] - The company shipped 472,000 net tons in the quarter, a decline of 6.2% versus the prior year quarter, attributed to weakening market conditions [18] - Net sales realization averaged CAD 11.32 per tonne compared to CAD 11.87 per tonne in the prior year period, reflecting weakening market conditions [18] Market Data and Key Metrics Changes - The U.S. market is effectively closed to Canadian steel producers due to prohibitive 50% tariffs, significantly impacting export sales [7][10] - The Canadian plate market is characterized as stable, with the company holding over 40% market share, while the sheet market remains weak [28] - Pricing in the Canadian plate market is about 40% lower than in the U.S. plate market, which is currently a spot market [29] Company Strategy and Development Direction - The company is focused on completing its transition to lower cost, lower carbon green steelmaking, positioning itself as a competitive and sustainable operator [9][15] - Algoma is actively engaging with policymakers to ensure the strategic importance of Canadian steelmaking is recognized and supported [16] - The company is pursuing opportunities aligned with domestic demand in sectors such as defense, infrastructure, and clean manufacturing [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented disruption in the steel industry due to trade barriers and macroeconomic volatility, but remains optimistic about market normalization in the future [8][9] - The successful production of first steel from the EAF Unit 1 is seen as a transformative milestone, reinforcing confidence in the company's transformation strategy [12][15] - The company is reviewing multiple scenarios to manage risks associated with prolonged U.S. tariffs and is actively working on liquidity management [13][14] Other Important Information - Cumulative investment in the EAF project was CAD 880.5 million as of June 30, 2025 [12] - The company received final approval totaling CAD 21.3 million related to its EAF investment under Ontario's emissions performance program [21] Q&A Session Summary Question: Can you talk about the current plate market? - The plate market in Canada is stable and not as oversupplied as the sheet market, with the company building market share to over 40% [27][28] Question: How does Canadian pricing compare to U.S. pricing? - Canadian plate pricing is about 40% lower than U.S. pricing, currently operating as a spot market [29] Question: What is the remaining CapEx for the EAF project? - The guidance remains unchanged, with the project being de-risked by demonstrating the operation of the first unit [30] Question: How will CapEx be affected if the market remains weak? - CapEx is expected to be lower if the market stays weak, with maintenance CapEx flexing between CAD 80 million to CAD 120 million [31] Question: What additional measures are being considered to improve liquidity? - The company is actively working on optimizing working capital to generate more cash during uncertain times [36] Question: What are the expectations for shipments in the upcoming quarters? - Shipments are expected to remain around current levels, with uncertainty driven by trade discussions [39] Question: How long can the company service volumes under the 50% tariffs? - The company and its customers will need to assess the situation as they approach the contract season in the fourth quarter [55] Question: What are the next steps for ramping up EAF production? - The company expects to produce approximately 200,000 tons of EAF steel in 2025, with ongoing construction and commissioning of the second unit [56][57]

Core Insights - Nucor Corporation (NUE) and Steel Dynamics, Inc. (STLD) are leading steel producers in the U.S., crucial for the domestic steel industry and relevant for investors amid rebounding steel prices [1] - U.S. steel prices fell sharply in 2024 but have recently increased due to tariffs and improving demand, benefiting domestic steelmakers [2][3] Nucor Corporation (NUE) - Nucor is the largest steel producer in North America, investing $6.5 billion in eight major growth projects through 2027 to enhance production capacity [5] - The company has made strategic acquisitions, including Southwest Data Products and Rytec Corporation, to expand its product portfolio and create cross-selling opportunities [6] - Nucor has a strong balance sheet with $4 billion in liquidity and returned $2.7 billion to shareholders last year, maintaining a 52-year history of dividend increases [7] - The current dividend yield is 2% with a payout ratio of 36% and a five-year annualized dividend growth rate of 7.9% [8] - Nucor faces demand weakness in markets like heavy equipment, which accounted for 28% of its total shipments in 2024 [8][9] Steel Dynamics, Inc. (STLD) - Steel Dynamics focuses on customer needs and market diversification, with ongoing projects to enhance capacity and profitability [10] - The company is ramping up operations at a new electric arc furnace mill in Sinton, TX, expected to significantly contribute to revenues [11] - STLD generated $1.8 billion in cash flow from operations in 2024 and has $2.6 billion in liquidity, ensuring it can meet debt obligations [13] - The company raised its quarterly dividend by 9% to 50 cents per share, with a dividend yield of 1.6% and a payout ratio of 26% [14] - Automotive market slowdowns have impacted STLD, with significant declines in North American automotive production affecting steel consumption [15] Price Performance and Valuation - NUE stock has decreased by 35.6% over the past year, while STLD has lost 6.7%, against an industry decline of 36.8% [16] - NUE trades at a forward earnings multiple of 12.05, a 15.6% premium over the industry average of 10.42 [19] - STLD trades at a forward earnings multiple of 11.22, below NUE but above the industry average [22] - The consensus estimate for NUE's 2025 sales suggests a 2.4% increase, while EPS is expected to decline by 11.5% [21] - In contrast, STLD's 2025 sales and EPS estimates imply increases of 3.4% and 3.5%, respectively, with positive trends in EPS estimates [23] Investment Outlook - Both NUE and STLD are positioned to benefit from rising steel prices and trade policies, but STLD is favored due to better valuation and growth prospects [25]