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‘Unprecedented’ drop in steel prices hurts bottom line of Hamilton’s Stelco

Rolls of coiled coated steel are shown at Stelco in Hamilton, Ont., on June 29, 2018.
Rolls of coiled coated steel are shown at Stelco in Hamilton, Ont., on June 29, 2018. THE CANADIAN PRESS/Peter Power

Stelco Holdings Inc. says it swung to a loss in its fourth-quarter after challenging market conditions including an “unprecedented” drop in prices.

The Hamilton-based steel producer says it lost $24 million, or 27 cents per diluted share, for the quarter ending Dec. 31, 2019, compared with net income of $110 million, or $1.23 per diluted for the final quarter of 2018.

Revenue totalled $435 million, down from $648 million a year earlier.

READ MORE: Feds give Stelco $50M towards modernization of Ontario steel plants

On an adjusted basis, Stelco says its net loss came in at $13 million, or 15 cents per share, compared with an adjusted profit of $123 million, or $1.38 per share a year earlier.

Analysts on average had expected an adjusted loss of 18 cents per share, according to financial markets data firm Refinitiv.

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Click to play video 'Global News Morning Market and Business Report – February 19, 2020' Global News Morning Market and Business Report – February 19, 2020
Global News Morning Market and Business Report – February 19, 2020

The loss came as the company saw a 28 per cent decrease in the average steel selling price and six per cent lower steel shipping volumes.

CEO David Cheney says the company has made changes to make the business more sustainable, pointing to a shift in its product mix towards higher value-added products for the auto industry, and plans to further diversify its product mix going forward.