Algoma CEO says Canada not doing enough to support steel industry during trade war

ASTLW is now a policy-repair story, not a traditional cyclicals recovery, and that matters for timing. The key second-order effect is that tariff protection without demand reallocation just preserves underutilized fixed assets: margin relief from import barriers is being offset by a slow domestic procurement pipeline, so earnings leverage remains negative until public-sector award velocity improves. In that setup, the real winners are downstream Canadian fabricators and processors that can secure domestic billet/plate supply at better visibility, while offshore competitors lose volume but may still pressure Canada through indirect channels if enforcement stays porous.

The biggest near-term risk is balance sheet fatigue over the next 1-2 quarters. When a heavily leveraged producer receives liquidity support but still posts widening losses, the market starts discounting a second funding round or covenant stress well before any formal distress event. That creates a path-dependent equity overhang: even if policy headlines improve, the stock can underperform until investors see two consecutive quarters of better utilization, not just announced subsidies.

The catalyst stack is binary and slow-moving: procurement wins in defense/infrastructure over the next 3-9 months, tighter anti-dumping enforcement, or a reversal in trade policy. Absent those, the company remains a beneficiary of protection but not of profitability. The contrarian angle is that the market may be overestimating how quickly ‘Buy Canada’ can translate into P&L; bureaucratic procurement delays can push meaningful earnings inflection into 2026, making near-term rallies vulnerable to fade on weak quarterly prints.