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ArcelorMittal (MT) and Spain Sign MoU for Decarbonization

ArcelorMittal MT signed a memorandum of understanding (“MoU”) with the government of Spain for a €1 billion (roughly $1.2 billion) investment in decarbonization technologies at its Asturias’ plant in Gijon. The investment is aimed toward the reduction of CO2 emissions at the company’s Spanish operations by up to 4.8 million tons, roughly 50% of emissions, within the next five years.

The MoU discloses the commitment of the company as well as the Spanish Government to transition toward a decarbonized steel industry. ArcelorMittal is set to launch new production processes that contribute to significant reduction of CO2 emissions. It will also enhance the company’s R&D capabilities in Spain to support the new project and innovation requirements.

The Spanish Government will promote reforms and investments to support the development and growth of a strong, more competitive and sustainable industrial sector. It will also endeavor to provide maximum financial support for the project, in line with Spanish legislation and European Union regulations.

ArcelorMittal expects that the support from Spain will help cover at least half of the additional cost to enable its operations to remain competitive as it ramps up its decarbonization program.

Shares of ArcelorMittal have surged 153.4% in the past year compared with 135.6% rise of the industry.

Image Source: Zacks Investment Research

ArcelorMittal, in its last earnings call, stated that it envisions global apparent steel consumption (“ASC”) to increase 4.5-5.5% in 2021. The figure suggests an improvement from contraction of 1% in 2020. The global steel industry is now benefiting from a favorable supply-demand balance and a low inventory environment, the company noted. ArcelorMittal expects ASC to grow on a year-over-year basis in 2021 in all of its core markets.

The company also revealed its priorities for the rest of the year, which include maintaining a competitive cost advantage to strategically grow through high-return projects in high-growth markets. It also intends to leverage existing infrastructure to develop iron ore resources, consistently return cash to shareholders through a defined capital return policy as well as lead on sustainable development.

ArcelorMittal Price and Consensus


ArcelorMittal price-consensus-chart | ArcelorMittal Quote


Zacks Rank & Other Key Picks

ArcelorMittal currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Nucor Corporation NUE, Olin Corporation OLN and Cabot Corporation CBT.

Nucor has a projected earnings growth rate of around 386.2% for the current year. The company’s shares have surged 128.6% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Olin has an expected earnings growth rate of around 506.7% for the current year. The company’s shares have skyrocketed 248.7% in the past year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 46.9% in the past year. It currently flaunts a Zacks Rank #1.

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