But if Canada wants to retain a manufacturing industry, then the steel
industry will need to be a part of it, he said, because steel is the
materials backbone of manufacturing.
Dr. Peter Warrian, a University of Toronto professor and Canada’s leading academic expert on the Canadian steel industry, told city council that the industry will always have a volatile market but the need for steel in the future could certainly increase.
While prices rose substantially – 40 per cent – between October 2016 and March 2017, allowing cash flow improvements for steelmakers like Algoma, the problem remains that the cyclical nature of the industry will not see those high prices be sustained for long periods of time. And that means, investments into pension plans, injections of capital improvements and maintenance plans will not get the long-term attention they need, he said.
And while this has been a problem experienced to Algoma, the local steelmaker found itself in a serious cash crunch because of the long-term contacts it had inked that found itself paying for raw materials at exceptionally high prices – much higher prices than actual market values, Warrian said. Continue Reading →