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ArcelorMittal (MT) Closes 80% Stake Buy in Voestalpine HBI Plant

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ArcelorMittal (MT - Free Report) recently acquired an 80% shareholding in voestalpine’s Hot Briquetted Iron (‘HBI’) plant located near Corpus Christi, TX, post the receipt of customary regulatory approvals.

The acquisition values the Corpus Christi operations at $1 billion. The plant is one of the biggest of its kind in the world. It has an annual capacity of two million tons of HBI, which is a premium, compacted form of Direct Reduced Iron (“DRI”) designed to overcome issues linked with shipping and handling DRI.

The transaction improves ArcelorMittal’s ability to manufacture the high-quality input materials required for low-carbon emissions steelmaking and reinforces its position as a world leader in DRI production.

Shares of ArcelorMittal have declined 23.7% in the past year compared with the 20.9% fall of the industry.

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The company, in its last earnings call, stated that it now envisions global apparent steel consumption to decline by up to 1% in 2022 compared with the previous guidance of an increase of up to 1%. The longer-term fundamental outlook for steel is positive. China is also focusing on decarbonization and removing VAT rebates on steel exports. Actions taken by governments to protect against the threats of unfair trade are also encouraging.

ArcelorMittal Price and Consensus

 

ArcelorMittal Price and Consensus

ArcelorMittal price-consensus-chart | ArcelorMittal Quote

 

Zacks Rank & Key Picks

ArcelorMittal currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Cabot Corporation (CBT - Free Report) and Nutrien Ltd. (NTR - Free Report) .

Allegheny has a projected earnings growth rate of 1,076.9% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 40.4% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 9.6% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 13.2% over a year.

Nutrien has a projected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 30.7% upward in the past 60 days.

Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 34.1% in a year. The company carries a Zacks Rank #2 (Buy).
 


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