Canadian Steel Plants Face Hot-Rolled Shortage as Stelco Layoffs Spark Government Scrutiny
Steel plants across Canada are grappling with a shortage of hot-rolled steel while Stelco Holdings Inc. idles operations in Hamilton, cutting roughly 350 jobs. Prime Minister Mark Carney is considering legal action against parent company Cleveland-Cliffs over alleged violations of employment commitments tied to its 2024 acquisition of Stelco.
Many steel plants across Canada are facing a shortage of hot-rolled steel, even as Stelco Holdings Inc. indefinitely idles its cold-rolled steel and galvanized operations in Hamilton, resulting in approximately 350 layoffs.
Butch Mandel, CEO of Welded Tube of Canada Corp., stated that buyers of hot-rolled steel are not getting close to their needs. The supply squeeze comes amid broader disruptions caused by the U.S.-Canada trade war. Prime Minister Mark Carney has been trying to support the Canadian steel sector since the United States imposed 50 per cent tariffs in 2025.
Stelco CEO Lourenco Goncalves attributed the Hamilton layoffs to a demand problem caused by foreign galvanized steel being dumped into Canada. However, Ron Wells, president of United Steelworkers Local 1005, called the layoffs a betrayal of the agreement with the government. Cleveland-Cliffs agreed to maintain unionized and non-unionized employee numbers as a condition for federal approval of its $3.4-billion acquisition of Stelco in 2024. On Tuesday, Prime Minister Carney stated that his government is considering taking legal action regarding the layoffs.
The domestic shortage is further complicated by cross-border trade dynamics. Two anonymous industry executives suggested Cleveland-Cliffs is exporting steel slabs to the U.S., which exacerbates shortages in Canada. Canadian exports of semi-finished carbon and alloy steel slabs to the U.S. rose to about 62,000 tonnes in July, up from 3,324 tonnes the previous year.
Colin Mang, an economics professor at McMaster University, noted that the trade war is causing real impacts on the Canadian steel sector after three decades of tariff-free integration.