Canada Steel Prices Rise 45% as Import Curbs Reshape Market

Canada's tighter steel-import controls are beginning to reshape the domestic market, with hot-rolled steel prices up roughly 45% since April and some producers reporting stronger profitability. Manufacturers and distributors, however, warn that reduced availability and higher prices are creating new pressure further down the supply chain.

MONTREAL (Scrap Monster): Canada's steel market is showing increasingly divergent effects from tighter import controls, with domestic steel prices rising sharply and some producers reporting improved profitability even as manufacturers, distributors and workers raise concerns about shortages, layoffs and higher costs.

The debate comes as the federal government continues to restrict steel imports in response to global overcapacity, trade diversion and ongoing U.S.-Canada tariff tensions.

Canadian hot-rolled coil prices have increased approximately 45% since April, rising from roughly C$1,100 to about C$1,600 per short ton, according to Fastmarkets data cited by the Financial Post.

The increase has pushed Canadian hot-rolled steel to levels not seen since the pandemic-era supply disruption.

Import Quotas Reduce Foreign Steel Access

Canada's current tariff-rate quota system places limits on steel imports from countries outside the Canada-U.S.-Mexico Agreement.

For countries with a free-trade agreement with Canada but outside CUSMA, quota levels are generally set at 75% of 2024 import volumes.

Countries without a free-trade agreement are generally limited to 20% of 2024 volumes.

Steel imported above those quota levels is subject to a 50% surtax.

The United States and Mexico are exempt from this particular tariff-rate quota system, although separate tariff measures can apply to U.S. steel and other categories of imported steel.

Stelco Reports Stronger Q3 Performance

Cleveland-Cliffs said Stelco delivered its strongest quarter since the U.S. steelmaker acquired the Canadian business two years ago.

The company said Canada's hot-rolled steel market improved substantially during the third quarter, making Stelco a positive contributor to adjusted EBITDA.

CEO Lourenco Goncalves has argued that Canadian policymakers should do more to restrict imports, particularly in galvanized steel, where Cleveland-Cliffs says the market remains oversupplied.

The company has decided to indefinitely idle Stelco's galvanizing lines while concentrating production on hot-rolled products.

Cleveland-Cliffs said total Stelco production tonnage will be maintained and approximately 2,000 Canadian jobs preserved despite the operating changes.

Higher Prices Seen as Necessary by Some Producers

Some steel executives argue that higher domestic prices are necessary to restore sustainable margins after years of weak pricing and global overcapacity.

Barry Zekelman, CEO of Zekelman Industries, told the Financial Post that stronger pricing could allow domestic producers to reinvest in plants and expand into products Canada currently imports.

From that perspective, tighter import controls could ultimately encourage more domestic capacity and reduce dependence on offshore supply.

Producers also argue that more predictable import rules could reduce large swings in domestic steel pricing caused by sudden increases in foreign supply.

Manufacturers Warn of Supply Shortages

Not all steel buyers are seeing the policy changes as positive.

Some manufacturers and distributors report that steel availability has tightened significantly, particularly for cold-rolled products.

Armando Infusino, materials manager at Ontario-based Claymore Metals, told the Financial Post that mills are allocating only a portion of the volumes some customers request.

For downstream manufacturers, shortages can create a difficult trade-off: pay higher prices for domestic material, wait for mill allocation, or consider importing finished products instead of manufacturing them in Canada.

That raises a broader policy issue. Measures designed to support primary steel production can create additional costs for manufacturers that use steel as an input.

Algoma Production Disruption Adds to Tight Supply

Supply conditions have also been affected by operational issues at Algoma Steel in Sault Ste. Marie, Ontario.

The company expects third-quarter steel shipments of approximately 145,000 tons, well below the previous three-year quarterly average cited by the Financial Post.

Algoma experienced an unplanned outage at its Lake Superior Power facility during the summer while simultaneously progressing through its transition to electric arc furnace steelmaking.

The company has since installed a replacement turbine and restored full power.

Algoma's EAF transition is expected to reduce its annual carbon emissions by approximately 70% compared with its former blast-furnace steelmaking process.

Stelco Slab Shipments Also Affect Canadian Availability

Another factor in the Canadian market has been Stelco's shipment of steel slabs to Cleveland-Cliffs operations in the United States.

The Financial Post reported that Cleveland-Cliffs confirmed Stelco had been shipping approximately 60,000 tons per month to U.S. facilities earlier this year.

Some Canadian steel buyers have argued that those shipments contributed to tighter hot-rolled steel availability in Canada.

Cleveland-Cliffs has separately maintained that cold-rolled and galvanized markets face weak demand and excessive import competition.

Union Challenges Stelco's Explanation for Layoffs

The debate is complicated further by planned layoffs at Stelco's Canadian operations.

Ron Wells, president of United Steelworkers Local 1005, which represents workers at Hamilton Works, disputes Cleveland-Cliffs' characterization of market conditions.

Wells pointed to profit-sharing payments received by workers during recent quarters as evidence that Stelco's Canadian operations have been generating profits.

The union maintains that demand for some products remains stronger than Cleveland-Cliffs has suggested.

Cleveland-Cliffs, by contrast, has said the galvanized market remains oversupplied and that idling those operations is necessary until conditions improve.

Automotive Buyers Say Demand Remains Strong

Canadian automotive manufacturers are also questioning claims of weak demand for cold-rolled steel.

Brendan Sweeney of the Pacific Manufacturing Association of Canada, which represents companies including Honda and Toyota, told the Financial Post that member demand remains strong.

That illustrates the central tension in the market: demand and availability can vary substantially by steel product even when overall industry conditions appear stronger.

Higher Steel Prices Create Risks for Downstream Industry

For steel-consuming manufacturers, higher domestic prices and limited availability could ultimately affect investment decisions.

Some buyers are reportedly examining whether importing finished goods may become more economical than importing steel and manufacturing those products domestically.

That possibility is especially important for smaller manufacturers that lack the purchasing power or supply-chain flexibility of large automotive and industrial companies.

Distributors have also warned that persistent shortages could eventually delay large construction or infrastructure projects if required steel products cannot be sourced on schedule.

Are Canada's Steel Measures Working?

The available evidence does not produce a simple answer.

For primary steel producers, tighter imports and higher domestic prices appear to be improving market conditions. Cleveland-Cliffs reported stronger Stelco results in Q3, while broader Canadian steel demand has increasingly shifted toward domestic supply.

For manufacturers and other downstream buyers, the same market adjustment is producing higher input costs and, in some cases, reduced availability.

Canada's steel policy is therefore creating different effects at different points in the supply chain.

The key test will be whether higher producer margins eventually lead to enough domestic investment and additional capacity to ease shortages without creating sustained cost pressure for Canadian manufacturers and construction users.

Source reporting: Financial Post, October 20, 2026.