Prismo Metals Inc. (CSE:PRIZ)
A leadership team with a proven ability to explore, operate and develop precious metal discoveries.
As of August 6, 2026, Canada’s 25% retaliatory tariffs on U.S. steel, aluminum, and automobiles remain in effect, while the United States has announced additional 50% tariffs on selected Canadian goods effective August 19. Prime Minister Mark Carney has indicated that further countermeasures remain possible. As trade tensions escalate, one Canadian steel producer — Algoma Steel Group (TSX: ASTL) — has caught investors’ attention.
Algoma is Canada’s only producer of discrete plate steel, with products widely used in construction, infrastructure, energy, shipbuilding, automotive manufacturing, and defense. In an environment where governments are pushing domestic procurement and defense manufacturing, this rare positioning gives it a unique competitive advantage.
On the flip side, the opportunity also comes from the direct dividend of tariffs. With Canada’s 25% tariff on U.S. steel, American suppliers are either forced to absorb margin pressure or lose orders altogether. Domestic mills, in turn, gain pricing power and the potential for order transfers — without having to change a thing. Algoma has already reduced its U.S. shipment mix from the historical 45%–55% range to 28% in the first quarter, while posting record plate sales, suggesting that infrastructure and defense demand are helping to offset the loss of the U.S. market.
More importantly, the company is pushing forward with an electric arc furnace (EAF) transition. Its first EAF is already operational, with the second expected to begin steelmaking within the third quarter. This transition is expected to lower costs and produce cleaner “green steel,” making it a better fit for Canadian domestic project requirements.
However, the risks are equally significant. Algoma expects second-quarter adjusted EBITDA of just C$5 million to C$15 million — a figure that includes a C$45 million insurance settlement and a sizable capacity-utilization benefit. In other words, excluding one-time items, the underlying business remains under pressure. The stock currently trades at around C$6.10, roughly 33% below its 52-week high, and remains unprofitable, rendering the price-to-earnings ratio useless. This is a turnaround play, not a conventional value stock.
Second-quarter results, due July 29, will be a key test of whether the EAF transition is repairing the financial picture. Investors also need to watch for risks including weak steel demand, execution challenges, tariff-related costs, government-backed debt, and the challenge of replacing lost U.S. sales. If the trade war broadens further, the pace of Canadian domestic projects that are supposed to support the company’s comeback could also be delayed.
All things considered, Algoma offers speculative upside — provided that the Canadian government continues to push domestic procurement and defense spending, while the company’s EAFs ramp up on schedule and effectively boost profitability. That said, this is not a blue-chip stock to “buy and forget,” but rather a high-risk turnaround story. For investors who are bullish on the tariff dividend and willing to bear execution risk, a small position may be a more prudent approach.
