ArcelorMittal (MT) and Snop Join Forces to Drive Decarbonization
ArcelorMittal S.A. MT and Snop, a prominent tier-one European automotive supplier, have taken a significant step toward environmental sustainability. The two companies have signed a memorandum of understanding (MoU) at Snop's headquarters in Villepinte, France, with a focus on advancing decarbonization efforts in the automotive sector. The collaboration aims to leverage ArcelorMittal's XCarb solutions to achieve this goal. XCarb encompasses all of ArcelorMittal's low-carbon emissions products and decarbonization initiatives.
One of the key aspects of the MoU is the trial of Usibor, a high-strength steel made using ArcelorMittal's XCarb recycled and renewably produced steel. Additionally, the agreement covers the supply and purchase of other XCarb solutions, including XCarb green steel certificates. Usibor, made with XCarb recycled and renewably produced substrate, has a significantly lower CO2 footprint compared to conventionally produced steel, with emissions reduced by almost 70%.
The initial focus of the collaboration between ArcelorMittal and Snop has been the production of high-strength structural car parts. The teams have already commenced manufacturing these parts, and testing is currently underway. By incorporating low-carbon steel in vehicle frames, both companies contribute to reducing the carbon emissions associated with automotive manufacturing.
Snop emphasized the significance of this partnership in achieving the company's environmental objectives. By leveraging low-carbon steel, Snop aims a 30% reduction in supply-chain emissions (scope 3) by 2030 and achieve net-zero emissions by 2050. The partnership with ArcelorMittal enables Snop to make significant contributions to this environmental endeavor while maintaining the high-quality standards required to satisfy its customers.
ArcelorMittal expressed gratitude for Snop's support and highlighted the importance of customer endorsement in driving decarbonization initiatives. ArcelorMittal Europe has set an ambitious target of 35% reduction in CO2 emissions by 2030 and achieving carbon neutrality by 2050.
At the Sestao plant, XCarb recycled and renewably produced flat products have been in production since 2022. The production process involves utilizing high levels of scrap steel and 100% renewable electricity through the Electric Arc Furnace route, aligning with the company's commitment to sustainability.
The collaboration between ArcelorMittal and Snop signifies a significant milestone in the pursuit of decarbonization in the automotive sector. By leveraging XCarb solutions and incorporating low-carbon steel, the companies are demonstrating their dedication to environmental stewardship, driving the transition towards a sustainable future in the automotive industry.
ArcelorMittal's shares have gained 18.8% in the past year against the 46.4% rise of its industry. The Zacks Consensus Estimate for MT’s current-year earnings has been revised 24.6% upward in the past 60 days.
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ArcelorMittal is expanding its steel-making capacity and remains focused on shifting to high-added-value products. As part of this move, it is expanding its automotive steel line of products globally by launching a new generation of advanced high-strength steels.
The company is expected to benefit from improved demand conditions in 2023 following aggressive destocking. Apparent demand conditions improved once the destocking phase reached its maturity in the first quarter of 2023. MT expects the absence of further destocking to maintain stronger apparent demand in 2023 compared to 2022. It sees world apparent steel consumption, excluding China, to rise by 2-3% year over year in 2023. ArcelorMittal also expects its steel shipments to grow roughly 5% year over year in 2023.
ArcelorMittal Price and Consensus
ArcelorMittal price-consensus-chart | ArcelorMittal Quote
Zacks Rank & Key Picks
ArcelorMittal currently has a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include L.B. Foster Company FSTR, Koppers Holdings Inc. KOP and Linde plc LIN.
L.B. Foster currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
L.B. Foster’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 140.5%, on average. FSTR’s shares have gained around 9% in a year.
Koppers currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for KOP’s current-year earnings has been stable over the past 60 days.
The consensus estimate for current-year earnings for KOP is currently pegged at $4.40, reflecting an expected year-over-year growth of 6.3%. Koppers’ shares have rallied roughly 45% in the past year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 1% upward in the past 60 days.
Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have popped roughly 30% in the past year.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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