Oct 29, 2026 earnings call — Power restored; new EAF ramping
EAF Unit 2 achieved first commercial heat on October 9; the company shipped approximately 144 thousand tons this quarter.
Revenue $0.2B (est $0.2B) · EPS $-0.84 (est $-0.49)
Key quotes
"With power restored and both EAF units now in our production schedule, we expect fourth quarter shipments to increase by approximately 25% to 35% versus the third quarter."
"We shipped 105 thousand tons of plate, approximately 73% of total shipments and more than we shipped in the third quarter of last year."
"Operating activities generated $78.6 million of cash in the quarter, compared to a cash used of $79.4 million in the second quarter."
Analyst Q&A 4
Starting two furnaces and next-year output
Q (Katja Jancic · BMO): She asked how the two furnaces will be ramped next year and how much volume they expect. She also asked whether ramping up will hurt sheet prices in Canada.
A: Management said the ramp has started and is going well, and they are learning to run both furnaces by arcing them alternately. They expect production by end of next year to average from 1.5 million to 1.6 million tons, with a year average around 1.2 million as they continue ramping. On pricing, they said market pricing depends on many factors and they will be disciplined as they grow.
"And our production by end of the year should be at an average of you know, from 1.5 million to 1.6 million tons by end of the year." — Rajat Marwah (CEO)
Government funds, contracts, and production flexibility
Q (Ian Gillies · Stifel): He asked which projects fit the Canadian government support and how such funds would work with their current capital structure. He also asked if infrastructure contracts are tangible, whether scrap supply limits the ramp, and if higher demand could raise output above guidance.
A: They said the government support is focused on diversification and they are exploring which programs fit projects like the beam mill, with many discussions ongoing. They have seen orders and growing activity, helped by Buy Canadian policies, but the process is new and taking time. Scrap procurement has not been an issue; the ramp is driven by a learning curve and a prior power outage; with available power and alternate arcing they could be as high as 1.8 million, 1.9 million tons but timing is uncertain.
"You look at the capacity perspective with the power that we have available and alternate arcing, we could be as high as 1.8 million, 1.9 million tons." — Rajat Marwah (CEO)
Production costs, utilization charge, turbine CapEx
Q (James McGarragle · RBC): He asked to confirm the exit production rate and how the cost base looks at 1.5–1.6 million tons. He also asked how the capacity utilization charge will evolve and for details on the turbine CapEx and any wider implications.
A: They confirmed the exit production target at about 1.5 to 1.6 million tons. On cost, they said next year through the ramp they expect costs directionally higher from $220 or $225, with a step down in 2028 when new power comes on; volume increases should also improve cost structure. On the turbine, the outage was unplanned, they view adding a third turbine as prudent for redundancy, about 25% down payment flowed to capital, the all-in cost is approximately $35 million USD, and the balance is expected to be financed over a 4-year period.
"And the all in cost for the turbine is approximately $35 million USD." — Michael Moraca (CFO)
Maintenance timing and Q4 working capital
Q (Albert Realini · Jefferies): He asked whether planned maintenance was completed during the Lake Superior outage or deferred into Q4/Q1 2027. He also asked for high-level expectations for Q4 working capital items, tax refunds, insurance payments, and the timing of any SunCoke settlement outflow.
A: They said they completed much of the tie-in work during the August 17 to 29 outage, and they were able to ship additional product which flexed inventory; production will be slightly higher in Q4 to support inventory. On working capital, they would not comment on specific settlement amounts, but they do have the balance of income tax receipts that came in post quarter and expect some impact from the settlement to flow in the quarter. They also said they will build some raw material working capital as they approach year end to support the EAF ramp.
"For us, we do have the balance of the income tax receipts, that have come in post quarter." — Michael Moraca (CFO)