Algoma Steel Inc. (ASTL) saw its stock price soar 5.18% in intraday trading, despite reporting a challenging first quarter for 2025. The steelmaker's shares rallied as investors looked past the immediate financial setbacks and focused on the company's strong balance sheet and future growth prospects.

While Algoma reported a net loss of $24.5 million and an adjusted EBITDA loss of $46.7 million for the quarter, several positive factors caught investors' attention. The company maintained a robust financial position with $226 million in cash and total liquidity of $587 million. Additionally, Algoma made significant progress on its Electric Arc Furnace (EAF) project, with first steel production expected in the second quarter of 2025, potentially boosting future profitability.

Despite facing headwinds such as lower realized pricing and higher production costs, Algoma showed improvements in operational efficiency. The company successfully reduced inventory levels by $138 million compared to the previous quarter, enhancing working capital efficiency. Furthermore, plate shipments increased to approximately 91,000 tons, with expectations for further increases in the coming quarter. Algoma's participation in the Canadian defense supply chain also provides a positive outlook for future demand of its plate products, which may have contributed to investor optimism and the subsequent stock price surge.