Faced with U.S. tariffs, the Canadian steel industry and Algoma’s fortunes have declined since Barry Zekelman first bought his stake in the steel mill.MARK FELIX/The New York Times
Steel tycoon Barry Zekelman has cut his stake in Algoma Steel Group Inc. ASTL-T, as the trade war takes a heavy toll on the Canadian steel maker and its share price.
In a filing with the U.S. Securities and Exchange Commission on Tuesday, Zekelman Industries Inc., the privately held steel company controlled by Mr. Zekelman, said it had reduced its holdings in Algoma to 3.08 per cent from 5.02 per cent.
Mr. Zekelman amassed his original stake in Sault Ste. Marie, Ont.-based Algoma in July, 2024, at a time when the Canadian steel industry was in much better shape.
After making his Algoma investment, Mr. Zekelman hinted in an interview with The Globe and Mail that he might even be interested in acquiring the company, saying it was a longstanding dream of his to own a steel mill.
But the Canadian steel industry and Algoma’s fortunes have deteriorated significantly since U.S. President Donald Trump launched a trade war against Canada earlier this year. Algoma is currently facing tariffs of 50 per cent in the U.S., a level that has cut off that market for the steel maker.
Chicago-based Zekelman Industries is the biggest independent steel pipe and tube maker in North America. Mr. Zekelman is a native of Windsor, Ont.
Canadian aluminum, steel products dealt biggest blow from U.S. duties in June, data show
According to the 2024 SEC filing, Zekelman Industries spent approximately US$42-million to buy shares in Algoma when it was trading at around $11.90 a share. This week’s SEC filing doesn’t detail the exact timeframe when he sold, but in the 60-day period leading up to the filing, Algoma’s stock traded between roughly $9.50 and $6.50 a share, suggesting Mr. Zekelman incurred a significant loss on his investment.
When reached by The Globe on Wednesday morning, Mr. Zekelman declined to comment.
Pressure on Algoma has risen over the past few months as the trade war drags on. Despite multiple rounds of talks with the U.S., Prime Minister Mark Carney’s administration has been unable to secure tariff relief on steel for Canada.
Mr. Zekelman has criticized Ottawa for not going far enough to protect its domestic steel sector from the Trump tariffs.
Amid tariff turmoil, will Algoma find demand for its green steel?
Algoma CEO Michael Garcia told The Globe and Mail in July that his company was seeking up to $600-million in loans to bolster its liquidity as its U.S. revenue was evaporating. Mr. Zekelman said the loan terms being offered to Algoma were exorbitant, and that Ottawa was behaving like a loan shark.
Ottawa in the summer rolled out anti-dumping measures in a bid to help Algoma and other Canadian steel makers win more business at home. Steel makers from countries that don’t have free trade agreements with Canada will face tariffs of 50 per cent if they ship volumes into Canada that exceed half of 2024 levels.
The move was designed to help Algoma better compete with countries such as China and Turkey that are accused of dumping cheap steel into the Canadian market.