ArcelorMittal (MT) Achieves Milestone with Ethanol Production
ArcelorMittal MT achieved a milestone with the first industrial production of ethanol at its Steelanol plant, marking Europe's inaugural carbon capture and utilization (CCU) project. This historic achievement was recorded on Nov 7, 2023, at ArcelorMittal Belgium's Gent plant, representing a significant stride toward the full commissioning of the Steelanol facility. The collaboration with key partners, including LanzaTech, Primetals Technologies and E4Tech, has been pivotal throughout this project.
The Steelanol plant captures carbon-rich industrial gases emitted during steel production at ArcelorMittal Gent, utilizing LanzaTech's cutting-edge carbon biorecycling process to convert them into ethanol. LanzaTech's technology employs proprietary bacteria (biocatalyst) that consume carbon gases. It transforms them into crucial chemical building blocks such as ethanol, resembling a brewery process where microorganisms replace yeast and carbon gas replaces sugar.
Officially inaugurated in December 2022, the Steelanol plant underwent cold commissioning before the introduction of the biocatalyst through inoculation in the subsequent months. The initial ethanol samples were produced in Jun 2023. In the following weeks, gases from the blast furnace were safely introduced into the bioreactors. The culmination of these efforts resulted in the first industrial-scale production of ethanol from one of the four bioreactors on Nov 7, with further production ramp-up anticipated in the coming months. The plant boasts an impressive capacity to generate 80 million liters of advanced ethanol, nearly half of Belgium's current demand for fuel mixing. It has the potential to curtail annual carbon emissions from the Ghent plant by 125,000 tons.
The ethanol produced in Gent serves as a foundational component for diverse products, including sustainable transport fuels, packaging materials, clothing and cosmetic perfumes, contributing significantly to global initiatives aimed at decarbonizing the chemical sector.
ArcelorMittal, in conjunction with its partners, secured funding from various sources, including the European Union's Horizon 2020 program and the European Investment Bank, to facilitate further research, development and the scaling up of the project. The Flemish government played a crucial role by providing strategic environmental support through VLAIO, the Flemish Agency for Innovation and Enterprise.
Shares of ArcelorMittal have lost 9.8% in the past year compared with a 14% rise of the industry.
Image Source: Zacks Investment Research
ArcelorMittal posted earnings of $1.10 per share in third-quarter 2023, down from $1.11 from the previous-year quarter’s levels. The figure beat the Zacks Consensus Estimate of $1.03. Total sales increased 12% to $16,616 million, missing the consensus estimate of $17,075.1 million. Lower steel prices primarily caused the downside.
The company projects a 1-2% year-over-year rise in global steel consumption (excluding China) in 2023. ArcelorMittal maintains a positive outlook on steel demand over the medium to long term. Capital expenditures for 2023 are expected to be $4.5-$5 billion. Strategic projects are likely to generate an additional $1.3 billion in normalized EBITDA.
ArcelorMittal Price and Consensus
ArcelorMittal price-consensus-chart | ArcelorMittal Quote
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. AXTA, sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. ANDE and Alamos Gold Inc. AGI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AXTA’s current fiscal year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.7%. The company’s shares have surged 17.7% in the past year.
The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised 8.6% upward in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 35.3% in a year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 52 cents, indicating year-over-year growth of 85.7%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 36.7% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Andersons, Inc. (ANDE) : Free Stock Analysis Report
ArcelorMittal (MT) : Free Stock Analysis Report
Alamos Gold Inc. (AGI) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
