ArcelorMittal MT announced its plan to build an Electric Arc Furnace (“EAF”) steel-making facility at AM/NS Calvert.
AM/NS Calvert is the world’s most advanced steel finishing facility and it further showcases the highly successful partnership between ArcelorMittal and Nippon Steel Corporation.
Upon completion, the facility is expected to be capable of manufacturing 1.5 million tons of steel slabs for the Hot Strip Mill and producing a wide variety of steel grades required for Calvert’s end-user markets. Further, the company stated that the construction of the facility is expected to take 24 months. The new facility is expected to create 300 additional jobs in the community.
Per the company’s management, an electric arc furnace at Calvert allows its asset to be more reactive to the local market. Moreover, it aligns with the company’s ambition of manufacturing smarter steels for a better world.
Notably, the addition of an EAF at AM/NS Calvert offers a transformational opportunity for what is already widely considered to be the world’s most advanced steel finishing facility. A new EAF at AM/NS Calvert is expected to further secure ArcelorMittal’s leadership in the North America automotive market.
ArcelorMittal’s shares have lost 1.2% in the past year compared with the 1.7% decline of the industry.
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On its second-quarter earnings call, the company stated that it will be prudent to remain cautious about the outlook despite signs of activity picking up, particularly in regions where lockdowns have ended. It is examining necessary structural changes to ensure that it is well-positioned to prosper in the years ahead as demand recovers. The company expects the remainder of 2020 to be challenging. It is prepared to increase production and realize the improvement in demand as it comes.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Equinox Gold Corp. EQX, Eldorado Gold Corporation EGO and Royal Gold, Inc. RGLD.
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The stock has rallied around 111% in a year. It currently has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Eldorado Gold has a projected earnings growth rate of 2,225% for the current year. The company’s shares have gained around 44% in a year. It currently has a Zacks Rank #2.
Royal Goldhas an expected earnings growth rate of 62.1% for 2020. The company’s shares have gained 7.4% in the past year.It is presently a Zacks #2 Ranked player.
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