Arcelor Mittal Thesis Update
Updating our original 7/16/2025 thesis
Data as of Original Thesis: 7/16/2025
Market Cap: $24,345,800,000
P/B: 0.47x
Net Debt: $5,100,000,000
EV: $29,445,800,000
Shares Outstanding: 768,550,000
Closing Price 7/16/2025: $32.58
Updated Data as of 2/3/2026
Market Cap: $42,854,370,000
P/B: 0.79x
Net Debt: 9,135,000,000
EV: $54,118,550,000
Shares Outstanding: 760,600,000
Current Price: $56.92 (75% increase)
Purpose 2/3/2026
The purpose of this piece is to update particular sections of the main thesis that will have section headers highlighted by todays date - February 2nd, 2026. Our Any information that is not beginning with a highlighted header is original information from the main thesis that remains relevant today. Our goal for the thesis we write is to make them living documents that can be updated overtime as information comes in.
Business Overview
Arcelor Mittal is the second largest producer of steel in the world, and the largest in the work ex-China producing 70M crude tons of steel for the full year 2024. The business has a vast footprint with 130K employees across four continents with integrated mini mill capacity and raw material capabilities providing a sustainable cost advantage on a cash cost per ton basis. Arcelor Mittal competes in what I consider to be the best markets for steel demand growth in the world with 60% of EBITDA coming from North America, Brazil, and India. For a laundry list of reasons, we believe the markets ArcelorMittal serves are advantaged for the next decade and despite weakness in steel related equities since the Global Financial Crisis, this business is poised to generate outsized returns through the next decade. Originally known for buying underperforming steel assets globally, cutting costs by reducing headcount and adding efficiencies, Mittal Steel has transformed itself through a few key acquisitions (most importantly Arcelor itself) to become one of the best steel producers in the world today with competitive advantages and the ability to grow its earnings further with growth capex projects that we think could double the businesses steady state earnings in the coming 3-5 year period.
2025 Production, World Production Trends & Financial Metrics 2/3/2026
World Production Trends + China
For 2025 the world produced 1.8B tons of crude steel which was a 2% decline vs the 2024 figures. Importantly, Chinese production though it was over 50% of world production (960M tons) was down 4.4% from the 2024 levels. China has been the swing producer of steel for some time and has been the cause of the deep recession we have experienced in steel worldwide. Not only did China over build steel stocks prior to the COVID crash but these effects were exacerbated by the consumption of steel in China declining as their real estate & construction sectors blew up post COVID.
China’s largest internal concern in our in-house view is keeping the masses employed. It was estimated that the Steel-rolling industry employed roughly 3.4M people in 2024 not to mention the entire ship building industry in China is based on flipping cheap steel. Overall estimates have 10M people directly tied to the production of steel within China. China’s governmental structure avoids conflict with the citizenry so long as calories are being consumed and unemployment is reasonable.
Understanding that fact, China has operated at below their break-even price of steel for a long time and these trends have created a massive deflationary cycle that China can only allow for so long. It appears that we have hit the limits of that deflationary cycle and that 2024-2025 will go down as a major inflection in world steel supply/demand balance. Our conclusion is that Steel has reached an inflection point and the bottom is in – from here we think a recovery has begun though it will not be linear as cyclical businesses tend to hit snags along the way to prosperity.
“Coal imports were 8% lower in the five months to the end of May, official data showed. A decline of 100 million tons this year would amount to a drop of 18.4% annually…The decrease in China’s coal imports in 2025 will exceed expectations,” Li said, without indicating how much he expected imports of thermal coal and metallurgical coal to fall.” Mining.com
“Industry management of the steel sector should be strengthened to phase out backward and inefficient production capacity, support competitive enterprises and promote a balanced market, it adds… The application of steel structures in construction, transportation and infrastructure should be expanded, as part of efforts to unleash consumption potential.” State Council of the Peoples Republic of China
Internal Production Trends + Cashflow Capabilities for 2025
2024 saw ArcelorMittal produce roughly 70M tons of crude steel. For 2025 year to date production is 42.8M tons for an average of 14.26M tons per quarter. Extrapolating that figure forward annual production for 2025 will be roughly 57M tons of crude steel. If we couple the production figure with consensus 2025 estimates of $6.46B of EBITDA and $3.32B in net income this translates to a margin of $113/t of EBITDA for the full year.
The company’s organic growth projects are anticipated to add $800M of EBITDA in 2026. Arcelor Mittal reports earnings on February 5th for the full year 2025 and we intend to post an update if we find it value add to our readers to do so. In addition to the financial performance, we would also like to note the debt offering the company issued in September of 2025. It was a $767M USD ($650M euro) raise with a 3.250% coupon. The debt was used to refinance some existing debt and also to fund general corporate expenditure.
Not only were these notes issued by in the twelve months previous net debt has increased on the back of $1.2B from consolidation of Calvert, Tuper and AMBTA in the 2nd quarter and then another $1.2B in strategic capex for growth projects. In addition to the net debt increase Q425 will see a release of roughly $1.9B release of working capital which will all fall to the free cashflow line.
A Note on Europe 2/3/2026
