ArcelorMittal shares: Price analysis before buying or selling

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ISIN code: LU1598757687

Ticker: AMS: MT

Index or market: CAC 40

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Elements to consider before selling or buying ArcelorMittal shares

Analysis N°1

Global economic conditions: Like any company operating in the steel sector, ArcelorMittal is highly dependent on global economic conditions and can impact its share price.

Analysis N°2

Raw material prices: The price of raw materials, particularly iron ore and coal, can have a significant impact on the cost of producing steel. If the prices of these raw materials increase, this may lead to a decrease in ArcelorMittal's margins and therefore may impact its share price.

Analysis N°3

Competition: ArcelorMittal operates in a competitive market and faces competition from other steel producers, particularly from China. Competitive developments may impact on the share price.

Analysis N°4

Public policies: Public policies, such as trade protection measures or environmental regulations, may have an impact on ArcelorMittal's results and therefore on the share price.

Analysis N°5

ArcelorMittal's financial results: The company's financial results, including earnings, sales and growth prospects, can also influence the share price. Investors pay particular attention to the company's quarterly and annual results.

Analysis before buying or selling ArcelorMittal shares

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General presentation of ArcelorMittal

If you are interested in buying or selling ArcelorMittal stock and wish to perform an analysis of its price, you must of course have a thorough knowledge of this company and its main activities and sources of income. That is why we offer you here a complete presentation of this company and its sources of profit.

The ArcelorMittal Group is a French company operating in the steel industry. More precisely, it is the world leader in this sector.

To better understand the group's activities, they can be divided into different divisions according to the share of turnover they generate, as follows

The sale of flat carbon steel alone represents more than 59.3% of the company's turnover with hot and cold rolled steel coils, coated sheets and others.
Next comes the sale of long carbon steel, which generates 20.9% of the company's turnover with beams, concrete reinforcing bars, merchant steels, wire rods, sawing wire, sheet piling, public transport rails, special sections and wire products.
The next largest segment is sales of iron ore and coal, which generate 2.7% of the company's turnover.
Sales of tubular products represent 2.5% of turnover.
Finally, the remaining 14.6% of turnover comes from other products and services, including the transformation, distribution and trading of steel.

The products sold by the group are intended for various sectors including the automotive, household appliance, packaging and construction industries.

Geographically, the ArcelorMittal group generates 7.9% of its turnover in Germany, 5.8% in France, 5.3% in Spain, 30.4% in Europe, 18.8% in the United States, 19.1% in the Americas and 12.7% in Asia and Africa.

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The major competitors of ArcelorMittal

Let us now discover the main competitors of the ArcelorMittal group with a presentation of the main players in this sector and some information about them.

China Baowu Steel

This company, formerly known as Baosteel, is currently ArcelorMittal's biggest competitor. It is the largest steel manufacturer in China. The company's headquarters are located in the suburbs of the Baoshan district of Shanghai. The group currently employs over 35,000 people and is headed by Ai Baojun. It should be noted here that this company is a state-owned enterprise and in 2019 it became the world's largest steel manufacturer, overtaking ArcelorMittal.

ThyssenKrupp AG

Another direct competitor of ArcelorMittal is the German steel group officially created in 1999, ThyssenKrupp AG. The latter was formed by the merger of Friedrich Krupp AG Hoesch-Krupp and Thyssent AG. It owns and operates several subsidiaries worldwide but has two headquarters, one in Essen and one in Duisburg. In the past, its headquarters were located in Düsseldorf. Today, ThyssenKrupp employs more than 160,000 people and its activities are divided into several divisions with Steel Europe, Automotive Components with Component Technology, Elevators with Elevator Technology, Materials with Material Services, Industrial Solutions with Industrial Solutions and Marine Systems with Marine Systems.

Tata Steel Europe

Tata Steel Europe, formerly known as Corus Group, is a steel and aluminium production company. It is one of the subsidiaries of the Indian steel group Tata Steel and was formed by the merger of Koninklijke Hoogovens NV and British Steel plc in October 1999. The company changed its name to Tata Steel Europe in 2010.

Salzgitter AG

Another competitor of ArcelorMittal is Salzgitter AG which consists of two companies with Reichwerke AG fur Berg and Huttenbetriebe AG which was founded in 1962. It was subsequently taken over by the Preussag AG group in 1989. The second company was re-founded in 1998 from Preussag Sthal AG when the purely steel activities of Preussag AG were dismantled and the company was subsequently converted to tourism. Salzgitter AG is now a German steel group with around 100 companies. The group is listed on the SDAX and employs over 25,000 people. It is also ranked 5th in Europe in the field of profiled beams and flat products and 1st worldwide in tube rolling.

US Steel

Finally, the last major competitor of ArcelorMittal is the American group US Steel, formerly known as United Steel Corporation. It is a US-based steel producer with significant operations in Central Europe. The company was formed in 1901 through the merger of the Federal Steel Company and Andrew Carneige's steel mills.

The major partners of ArcelorMittal

The strategy of the ArcelorMittal Company against its competitors relies upon a strategy based on certain strategic partnerships including the following:

TechnipFMC

In 2014, ArcelorMittal was chosen by the TechnipFMC Group as sole partner for the supply of high resistance steel wire destined for the development of crude oil and offshore gas fields.

Steelcame

On the 10th February 2017 the metals company ArcelorMittal announced the creation of a joint venture with the Italian Cellino Group which would be named Steelcame. This would take over the assets of Solustil, a French subsidiary of the ArcelorMittal Group specialised in the processing of steel products.

Air Liquide

Air Liquide and ArcelorMittal, worldwide leader in steel production, also signed two long term renewal contracts in 2017 for the supply of oxygen, azotes and argon from the production site of ArcelorMittal situated in the port industrial zones of Fos-en-Mer and Dunkirk in France. Air Liquide thereby strengthened its position at Gand, Belgium by signing a new long term supply contract with ArcelorMittal to support the growth in its requirements of industrial gasses. Within the framework of this new contract Air Liquide would increase its pipe network in the Benelux area.

Veolia

In 2018, the ArcelorMittal Group also implemented a partnership with the Veolia Group and its subsidiary Veolia Industries Global Solutions relating to the creation of a joint venture which had the objective of modernising the energy production centre of Veolia in Fos-en-mer through the environmental improvement of this site by the optimisation of energy recovery from the steel production gases and a reduction in CO2 emissions.

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The factors in favour of a rise in the ArcelorMittal share price:

The first thing we can note as an undeniable advantage of the ArcelorMittal Company of course relates to its position in its major activity sector. In fact the group is currently the leader in the metal industry sector worldwide and is alone responsible for 7% of the steel production on an international level. It also retains its position as world leader in mining operations, well in front of its competitors.

The markets where the ArcelorMittal group is most present are also advantages for this company from a strategic point of view. In fact, the group is notably present in the European market which offers the advantage of being protected by the anti-dumping regulations against steel originating from China. ArcelorMittal thereby enhances its reputation by holding 60% of the market share of steel sales in North America which is also a favoured market of the companies in this sector.

Over time, the ArcelorMittal Group has shown its ability to benefit from its experience and nowadays offers a vertical integration of its activities by itself completing different tasks, from the simple extraction to the distribution passing through the metals processing which of course assures consequent supplementary revenue and an increasingly strong presence on the market.

The international development strategy of this group, notably in the emerging countries where industries are increasingly in demand such as Brazil or South Africa are another factor in favour of investing in ArcelorMittal shares.

We also applaud the efforts made by this company to reduce its level of debt. ArcelorMittal implemented a strategy of increasing its capital coupled with a more stable profitability to achieve this objective.

To conclude we should note that the ArcelorMittal share price has recorded one of the highest rises on the stock market in recent years and benefits from an advantageous status as a ‘pure player’ in the eyes of the investors.

The factors in favour of a drop in the ArcelorMittal share price:

Firstly, if we count the industrial strategy implemented by the ArcelorMittal Company which consists of a completely vertical management from the extraction to the production as an advantage then we should also note that we are disappointed by the lack of boldness displayed by the group relating to the creation of value through its activities that display a lack of diversity.

Over recent years the company has also been subject to a rebound from a major drop in the price of certain commodities such as iron ore and coal. Due to this, its mines have been subject to a significant drop in profitability. The ArcelorMittal Group, due to its specific activities, is also highly exposed to movements in the steel market and the related prices. This effectively displays a recent significant drop due notably to a significant fall in the demand from China where the company achieves the largest part of its sales at the market price, thereby considerably reducing its margins. The price of steel has also been subject to a major fall in the United States, which has caused investors a certain amount of anxiety related to a possible drop in results over the coming years.

We may also admit to being a little anxious concerning the near future regarding the delocalisation of other production units of ArcelorMittal outside Europe notably due to the increasingly strict regulations relating to CO2 emissions.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Is the ArcelorMittal share price included in other stock market indices other than the CAC 40?

We do in fact know that the ArcelorMittal Group share price is currently listed on the principal French stock market index, the CAC 40 which means this is one of the top 40 French companies in terms of stock market capital. However this asset is also listed on other stock market indices such as the CAC All Share, the CAC All Tradable, the CAC Large 60, the Euronext 100, the IBEX 35, the LuxX and the AEX. Its principal index remains however the French CAC 40.

What has been the recent performance of ArcelorMittal shares?

If you wish to learn about the performance of the ArcelorMitttal share price over recent years we note that this has displayed a rise of 63.72% over the last year. Over the last two years it in fact showed a drop of 33.91% and over three years the price of this company’s shares lost 41.27% and 40.91% over the last five years. This information can be useful to better understand the base trends of this asset.

How much do you have to spend to buy ArcelorMittal shares?

The price of an ArcelorMittal share varies according to supply and demand in the stock market. The price of a share is determined by investors who buy and sell shares on the financial markets based on their perception of the company's value. It is therefore impossible to give an exact price for the purchase of an ArcelorMittal share, as the share price can go up or down at any time depending on various factors such as the company's financial results, market fluctuations, developments in the steel industry, economic and political news, etc. To find out the current ArcelorMittal share price, you can consult financial websites such as ours or the website of the stock exchange on which the share is listed. It is important to note that buying shares involves risks, and it is recommended that you do your own research and consult an investment advisor before making an investment decision.

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Analysis before buying or selling ArcelorMittal shares