ArcelorMittal (MT) Decarbonizes With New Electric Arc Furnace
ArcelorMittal MT Asturias signed a contract with industrial engineering firm Sarralle to construct a new electric arc furnace (EAF) in Gijon, marking a significant milestone in the company's decarbonization strategy for Spain.
Commencing early next year, the civil works at the site are anticipated to conclude in the final quarter of 2025 when the 1.1 million-ton EAF becomes operational. This advancement will enable the site to transition to the production of low carbon-emission steel, specifically for the long products sector, focusing on rails and wire rods. The shift from the conventional blast furnace route is expected to enhance competitiveness, especially in sectors with rigorous carbon criteria for public procurement contracts.
As part of the project, Sarralle will install a de-dusting system and a waste heat recovery unit to maximize energy efficiency in the new EAF. The initiative aligns with ArcelorMittal Europe's commitment to reducing CO2 emissions by 35% by 2030.
Sarralle emphasized the historical importance of the project as Spain's first foray into decarbonization, accomplished through the utilization of local technology. The company accentuated the transformative influence this initiative is poised to exert on the trajectory of the Spanish steel industry, specifically in the development of high-value-added products.
ArcelorMittal also underscored the strategic positioning of the Long Products business in Asturias as a pioneer in decarbonization. The company highlighted that the integration of state-of-the-art technology would not only streamline the production of high-value rails and wire rods but also play a crucial role in fostering a sustainable future while upholding the highest safety standards.
In anticipation of increased rail traffic as outlined in the European Union's Sustainable and Smart Mobility Strategy, the new facility in Gijon is poised to meet the rising demand for rails — particularly those made from low carbon-emission steel — in alignment with the EU Green Deal.
Shares of ArcelorMittal have lost 5.9% in the past year compared with a 16.1% rise of the industry.
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In the third quarter of 2023, ArcelorMittal reported earnings of $1.10 per share, slightly lower than $1.11 recorded in the year-ago quarter. However, it exceeded the Zacks Consensus Estimate of $1.03. In spite of a 12% increase in total sales to $16,616 million, the company fell short of the consensus estimate of $17,075.1 million, mainly due to lower steel prices.
ArcelorMittal anticipates 1-2% year-over-year growth in global steel consumption (excluding China) for 2023. The company maintains a positive outlook on steel demand in the medium to long term. Capital expenditures for 2023 are projected in the range of $4.5-$5 billion. Additionally, strategic projects are expected to contribute to 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 #4 (Sell).
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