ArcelorMittal produced twice the amount of steel in comparison to its closest competitor Nippon Steel & Sumitomo Metal (NISTUF) in 2014. Most recent announcements compare this year’s (2015) 1Q results to last year’s 1Q results; however, this can be deceiving as it doesn’t not take into account 4Q2014. While steel shipments are up this quarter, shedding some light of hope, sales are at a 5Q low and EBITDA naturally is down as well. The company suffered heavy losses of $728 million in Q1, slightly down in comparison to 4Q2014.
Steel consumption is slow and stagnant.
Commodities are reaching all-time lows, and the market does not seem to show any signs of recovery – except with perhaps oil which has recovered to $65+. ArcelorMittal’s statement that prices have “stabilized at a low level” in their recent quarterly report is simply untrue. At least there is no evidence to back that statement up, however the markets are very volatile and could very quickly bounce back.
The company is not just the biggest but also most global. It is hard to say if they are about to increase their revenues or not, but one thing is certain. If iron ore prices and coal prices increase, ArcelorMittal will be one of the biggest beneficiaries.
NAFTA is credited 26% of revenues and Europe for 39%, largely due to car production demand. South America is responsible for 13% of sales and Africa to 7%. The company should be aggressively expanding to China which will change this picture. In any case after being extremely oversold the share prices are now recovering – and should continue to do so.