ArcelorMittal sees EU steel tariffs boosting profits, capacity use

By Jack Ryan

 

ArcelorMittal SA, Europe’s top steelmaker, said earnings will benefit from stronger protectionist measures across the region.

 

In October, the European Union proposed doubling tariffs to 50% on all steel imports above a reduced quota. That will be a boon for ArcelorMittal, when the new import regime comes into force in July.

 

The EU’s carbon levy on imports — the so-called Carbon Border Adjustment Mechanism — also applies to emissions-intensive goods such as steel, and was recently extended to certain downstream sectors to avoid incentivizing manufacturing overseas.

 

CBAM and the new tariff regime “will enable European producers to recover to sustainable utilization levels, and generate healthy returns on capital,” Chief Executive Officer Aditya Mittal said in a statement on Thursday. ArcelorMittal is “very well positioned to benefit” from this change in the regulatory environment, he said.

 

 

ArcelorMittal shares rose as much as 3.3% in Amsterdam trading.

 

When India, the US and Latin American economies raised protectionist barriers to combat a wave of Chinese exports, there were fears that the European market would be flooded with cheap steel. The levy hikes have soothed those concerns, while Beijing is also slowly moving to target overcapacity in its 1-billion-ton a year steel sector.

 

ArcelorMittal expects apparent steel demand outside China — a barometer of the global economy — to grow by 2% in 2026.

 

“The industry in Europe, we believe it’s running today below 70% in terms of capacity utilization,” Chief Financial Officer Genuino Christino said in an interview. Once the restrictions on imports come into place, that should rise as high as roughly 85%, making the continent’s steelmakers more efficient and profitable, he said.

 

“Our focus in Europe is really to run our facilities at a higher capacity to regain market share from imports,” Christino said.

 

The company’s fourth-quarter earnings before interest, taxes, depreciation and amortization were $1.59 billion, slightly above analyst estimates.