Pandemic and supply chain issues are expected to impact Algoma Steel's production targets for its fourth quarter of 2022.
The Sault Ste. Marie producer of plate and sheet steel expects to ship between 540,000 and 550,000 tons in the final quarter of its fiscal year.
The company released its fourth quarter guidance in a March 23 news release. Algoma's fiscal year runs from April 1 to March 31.
The target - also known as guidance - is regarded as a slight decrease in steel shipments and production levels.
The guidance range was also based on prolonged labour issue involving Canadian Pacific Railway, beginning on March 20, which has since been resolved.
The Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is projected to be in a range of $310 million to $320 million.
Last month, Algoma said it shipped 552,544 tons during the third quarter, lower than expected, blaming it on customers' holiday shutdown, supply chain issues and pandemic challenges, which bumped up steel inventory levels.
Looking ahead, Algoma said they continue to generate significant cash flow and are confident that this trend will continue well into the next fiscal year.
Meanwhile, the opening phases of construction on Algoma's electric arc furnace comple continues with local contractor George Stone & Stones are pouring the foundations.
The $700-million project and its two furnaces are expected to come online in mid-2024. The cleaner steelmaking process will take coal out of the equation for the first time in Algoma's 120-year history.
