Steel producer ArcelorMittal (MT) is facing some issues lately, especially with the ongoing troubles with the U.S. Steel (X) deal and new tariffs about to hit. But give ArcelorMittal credit; it is not taking these matters lying down. In fact, it has at least two new plans in the works that may help with cost savings and improved production. Investors are less sure, though, and sent shares down over 2% in Tuesday afternoon’s trading.
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One of the biggest moves is a plan to move some of its support operations from Europe to India, where it will be able to save money. ArcelorMittal is already engaging in discussions with its European works council—which represents its employees—to figure out where to save some money as steelmaking’s entire European future is at stake.
While ArcelorMittal is not planning to move any actual steelmaking operations to India, it does plan to move “…certain business-support activities” to India instead. What those are are a bit unclear, though one wonders if customer service or similar facilities will make such a move. But with demand on the decline and supply remaining high worldwide, something had to give.
A Boost in the United States
Meanwhile, as part of a bid to work around surging tariffs on steel, ArcelorMittal is planning to open a new steel plant in the United States. Specifically, the plant will go in in Mobile County, Alabama, and at a cost of about $1.2 billion.
The new plant will focus on “…non-grain oriented electrical steel…,” reports note, with a specific focus on the electric vehicle market. It will also bring in about 200 permanent jobs to the region, the reports noted, and will start construction within the next few months. Production, meanwhile, should start up in 2027.
Is ArcelorMittal a Good Investment?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on MT stock based on two Buys and one Hold assigned in the past three months, as indicated by the graphic below. After an 2.01% loss in its share price over the past year, the average MT price target of $30.80 per share implies 12.24% upside potential.
