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ArcelorMittal's (MT) Hydrogen DRI Plant to Get Government Aid
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ArcelorMittal’s (MT - Free Report) steel plant in Hamburg, Germany, has been pledged financial support by the country’s federal government. The funding will support the construction of Germany’s first industrial scale hydrogen-based direct reduced iron (DRI) plant.
The government has expressed its willingness to provide €55 million of funding support toward the cause, which is half of the €110 million total capital expenditure required. The next step requires an affirmation by the European Commission of the government’s decision before the commencement of the installation of the plant that is expected to start production in 2025.
This particular steelmaking process has the advantages of zero carbon-emissions by utilizing electric arc furnaces powered by renewable electricity. The plant is a crucial part of the company’s Steel4Future strategy, which constitutes the transition of its four German plants — in Hamburg, Bremen, Duisburg, and Eisenhuttenstadt — to zero carbon-emissions steel production in the coming years.
ArcelorMittal’s plan of producing more than 1 million tons of zero carbon-emissions steel a year in the Hamburg plant alone is expected to save around 800,000 tons of carbon dioxide emissions annually. This will be significant contribution toward mitigating the global environmental concerns and aiming for sustainability.
ArcelorMittal noted that for the first time it will be able to produce 100,000 tons of DRI for steel production using hydrogen. It believes that the project is a noteworthy milestone in ensuring a low-carbon economy. The technology is transferable and this gives scope to other steelworks in the company’s ambit to convert to zero carbon-emissions steel production processes in the future. The production is more expensive than traditional methods and thus requires governmental support. The company has expressed its gratitude to the government of Germany for its desire to fund the project.
Shares of ArcelorMittal have surged 152.3% in a year, outperforming the industry rise of 120.8%. Its expected earnings growth rate for the current year is a whopping 1,731.2%.
Image Source: Zacks Investment Research
In its last-quarter earnings call, ArcelorMittal raised its outlook for global apparent steel consumption (“ASC”) for 2021 as it expects demand to further improve in the second half of the year. It now envisions ASC to increase in the range of 7.5-8.5% for 2021, up from its earlier expected growth of 4.5-5.5%. It noted that a favorable supply demand balance and a low inventory environment are supporting higher utilization levels and healthy steel spreads.
Image: Bigstock
ArcelorMittal's (MT) Hydrogen DRI Plant to Get Government Aid
ArcelorMittal’s (MT - Free Report) steel plant in Hamburg, Germany, has been pledged financial support by the country’s federal government. The funding will support the construction of Germany’s first industrial scale hydrogen-based direct reduced iron (DRI) plant.
The government has expressed its willingness to provide €55 million of funding support toward the cause, which is half of the €110 million total capital expenditure required. The next step requires an affirmation by the European Commission of the government’s decision before the commencement of the installation of the plant that is expected to start production in 2025.
This particular steelmaking process has the advantages of zero carbon-emissions by utilizing electric arc furnaces powered by renewable electricity. The plant is a crucial part of the company’s Steel4Future strategy, which constitutes the transition of its four German plants — in Hamburg, Bremen, Duisburg, and Eisenhuttenstadt — to zero carbon-emissions steel production in the coming years.
ArcelorMittal’s plan of producing more than 1 million tons of zero carbon-emissions steel a year in the Hamburg plant alone is expected to save around 800,000 tons of carbon dioxide emissions annually. This will be significant contribution toward mitigating the global environmental concerns and aiming for sustainability.
ArcelorMittal noted that for the first time it will be able to produce 100,000 tons of DRI for steel production using hydrogen. It believes that the project is a noteworthy milestone in ensuring a low-carbon economy. The technology is transferable and this gives scope to other steelworks in the company’s ambit to convert to zero carbon-emissions steel production processes in the future. The production is more expensive than traditional methods and thus requires governmental support. The company has expressed its gratitude to the government of Germany for its desire to fund the project.
Shares of ArcelorMittal have surged 152.3% in a year, outperforming the industry rise of 120.8%. Its expected earnings growth rate for the current year is a whopping 1,731.2%.
Image Source: Zacks Investment Research
In its last-quarter earnings call, ArcelorMittal raised its outlook for global apparent steel consumption (“ASC”) for 2021 as it expects demand to further improve in the second half of the year. It now envisions ASC to increase in the range of 7.5-8.5% for 2021, up from its earlier expected growth of 4.5-5.5%. It noted that a favorable supply demand balance and a low inventory environment are supporting higher utilization levels and healthy steel spreads.
ArcelorMittal Price and Consensus
ArcelorMittal price-consensus-chart | ArcelorMittal Quote
Zacks Rank & Other Stocks to Consider
Currently, ArcelorMittal holds a Zacks Rank #2 (Buy).
Other top-ranked stocks in the same space are Nucor Corporation (NUE - Free Report) , Aperam S.A. (APEMY - Free Report) , and Olympic Steel, Inc. (ZEUS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has a projected earnings growth rate of 478.7% for the current year. The company’s shares have jumped 133% in a year.
Aperam has a projected earnings growth rate of 429.8% for the current year. The company’s shares have appreciated 117.5% over the past year.
Olympic Steel has a projected earnings growth rate of 2,362.2% for the current year. The company’s shares have surged 116.1% in a year.