A Quick Overview of Arcelor Mittal -2012

Friday 9 March 2012 - Filed under investing

An Overview

Arcelor Mittal is a major world steel producer. In 2000-2007 the growth of the developing world with their infrastructure investments and car sales drove demand for steel.   Now we are dealing with the US housing crash in 2007, then current European slowdown, and now China’s problems.    ArcelorMittal is currently being priced in this environment of depressed demand for their products and macro uncertainty.

Macro Forces

If growth can return to China [unlikely to happen in the rapid growth form that we saw in the early 2000s] and demand for car sales can stabilize then the future of MT looks positive.

The Main Question

Will demand for basic materials [steel in this case] stabilize?  If general world demand is strong [ie Europe's problems pass & the world can find a replacement for all of the demand that was created by China] then the prospects for MT look pretty good.  At the time of this writing the stock is sitting around $20 which is the same price it was sitting at, at the end of 2008.  Relative to their industry the debt levels for this stock are not very high.  This is your average cyclical play.

2012-03-09  »  Juan