Why We’re Revising Our Price Estimate For ArcelorMittal To $5

+18.86%
Upside
26.45
Market
31.44
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MT
Arcelor Mittal

We are raising our price estimate for ArcelorMittal to $4.93, which is primarily driven by an improvement in the prospects of the company’s NAFTA division. The fortunes of the NAFTA division have improved with the imposition of anti-dumping duties by the U.S. Department Of Commerce (DOC) on steel imports to the U.S. from a number of countries that are suspected of exporting steel below market prices, including China. Though the DOC’s preliminary ruling still needs to be confirmed in a final ruling by the U.S. International Trade Commission (USITC), these regulatory measures have already taken effect with an increase in steel prices in the U.S. and a reduction in the share of imported steels in domestic steel shipments. With regulatory measures taking effect, the NAFTA division will benefit from robust demand for steel in the U.S., with demand expected to grow by 3.2% and 2.7% in the U.S. in 2016 and 2017, respectively, after a contraction in demand in 2015. The impact of these factors is reflected in our revised shipment and pricing forecasts for the NAFTA division.

MT Change in Price Estimate To $5

Have more questions about ArcelorMittal? See the links below.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for ArcelorMittal

 

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