ArcelorMittal earnings calls

Europe outlook and margins

Q (Alain Gabriel · Morgan Stanley): He asked for the outlook for Europe after restarting Fos-sur-Mer, how pricing should evolve into Q3/Q4 given lags, and whether ramp-up costs will hurt margins.

A: Management said order books and guidance point to better shipments and they have restarted furnaces, running all furnaces from Q3. They expect lower imports because of TRQ and to regain market share. Bringing capacity back will benefit fixed cost absorption, there will be more carbon costs to balance, but overall the new tons should be more profitable.

"Overall, our expectation is that these tons should be even more profitable than what we have today." — Genuino Christino (CFO)

Section 232 and Calvert EAF

Q (Alain Gabriel · Morgan Stanley): He asked whether the company is talking to U.S. policymakers to improve economics for a potential second EAF at Calvert, and how a Mexico Section 232-style tariff would affect the Mexican business.

A: Management said ArcelorMittal is committed to its U.S. franchise and the first EAF at Calvert is ramping well and will hit full capacity later in H2. They view a second EAF as consistent with U.S. policy to boost domestic melt capacity and are progressing detailed engineering on it. Any savings from policy would be determined by the Department of Commerce, and they are advocating for greater regional alignment across USMCA.

European inventory levels

Q (Ephrem Ravi · Citi): He asked about inventory levels in Europe and whether inventories are now low enough to allow the Q3 shipment increase. He also asked about the ETS extension and carbon allowances.

A: Management said inventories in Europe were largely as anticipated, with imports still elevated in Q2 but half-year comparisons relatively stable versus last year. They do not see inventories as overly excessive and cite strong customer engagement and southern exposure (France and Spain) as reasons for confidence in the guidance. They handed the carbon question to Daniel for detail.

"As we also talked about in quarter one, we don't really see that inventories are so excessive in Europe." — Genuino Christino (CFO)

EU ETS and carbon costs

Q (Ephrem Ravi · Citi): He asked whether the extension of free allowances to 2038 or ETS changes alter investment or decarbonization plans, and whether they have enough allowances for the blast furnaces being brought back.

A: Management said the ETS review and other EU measures are positive steps that balance decarbonization with competitiveness, citing extensions of free allocation, changes to the ETS cap, and support for industrial decarbonization. Their key concern is aligning rising carbon costs with conditions for large-scale decarbonization. They warned that higher European production will increase carbon costs, but Genuino expects operating leverage to more than offset that.

Brazil slab capacity and exports

Q (Reinhardt Van Der Walt · BofA): He asked how much spare slab capacity exists in Brazil and how much can be diverted to Europe now that Calvert is ramping.

A: Management said Brazil facilities are running at full capacity today, but the group has optionality to divert volumes where there are opportunities. They noted multiple sources of high-quality slabs including the 3 million tons and Tubarão, and emphasized ArcelorMittal's unique footprint and downstream capacity to bring slabs if needed.

"We are running our facilities in Brazil today at full capacity." — Genuino Christino (CFO)

Order book size and guidance

Q (Tristan Gresser · BNP Paribas): He asked whether the European order book is up year-over-year and if the increase is double digit.

A: Management pointed to the slide deck and said the quarter-on-quarter guidance is specific: historical mid-to-high single digit drops from Q2 to Q3, while this guidance is for stable or slightly higher shipments. They said they are in a strong position looking toward Q4 with good customer engagement.

"The guidance is for stable or slightly higher." — Genuino Christino (CFO)

Import parity and slab protections

Q (Tristan Gresser · BNP Paribas): He asked if tariff-paying imports could become the price setter for HRC in Europe, whether domestic capacity is sufficient, and whether idle facilities could be bought by foreign slab producers to become rerollers.

A: Management said demand still needs to rise; if demand improves imports could set import-parity prices, but it's early to tell and competition will matter. They added that bringing capacity back should raise marginal costs and support prices. They also said European policy aims to keep domestic capacity competitive and that slabs becoming part of the TRQ tool is likely to prevent long-term risks from imports.

Audio check and intro

Q (Andrew Jones · UBS): Analyst asked a quick audio check: can you hear me?

A: The host moved the call to the next question and introduced the analyst from UBS. The moderator acknowledged the handover and invited the question.

CapEx project timing and decisions

Q (Andrew Jones · UBS): He asked for timing and steps to implement CapEx projects not in the $1.8 billion guidance, where Essam stands, construction timelines, certainty, and the other projects. He also had a follow-up on decarbonization in Europe.

A: Management said they are capturing benefits from projects: $700 million of the $1.8 billion is expected this year, with $300 million captured in H1 and another $400 million expected in H2. They are advancing engineering on projects in Brazil, Calvert second EAF, India expansions, Liberia, Serra Azul, and U.S. EAF, and will take projects to the board after completing engineering to announce timelines and contributions. They said the company will invest when projects can earn a decent return and will prioritize capital where it delivers highest returns.

"As and when we complete the engineering work and we feel we have a good solution, then we will take that to our board, and we will announce more details, timelines, and contributions, et cetera." — Genuino Christino (CFO)

Q3 bridge and group outlook

Q (Boris Bourdet · Kepler Cheuvreux): He asked for the bridge into Q3 dynamics across regions, not just Europe.

A: Management said the bridge is simple: they expect all steel segments to improve sequentially into Q3 driven by higher shipments and higher average selling prices. They warned of some additional costs such as higher carbon costs as European production increases, and highlighted working capital unwind and higher H2 profitability supporting positive free cash flow this year and beyond.

Europe margin potential and consolidation

Q (Boris Bourdet · Kepler Cheuvreux): He asked what margin potential exists in Europe now and whether the company would view consolidation opportunities differently given the more supportive backdrop.

A: Management said they are encouraged by Q2 European profitability being very close to $100 and that they have not yet seen the full benefits of TRQ, implying upside potential. On consolidation, they said Europe could benefit from it but ArcelorMittal's focus is running and improving its own assets and earning its cost of capital.

"I'm very encouraged when I look at, if you look at our profitability in Q2, Europe, very close to $100 already." — Genuino Christino (CFO)

Liberia shipments and ramp

Q (Bastian Synagowitz · Deutsche Bank): He asked for a shipment number for Liberia in H1 to gauge what is left for H2 against the 18 million tons guidance.

A: Management said Liberia is progressing with two concentrator lines running, the second ramping and the third about to start, and they continue to guide for 18 million tons. They said they need to ship about 10 million tons in H2 to reach the plan, that port/rail infrastructure is in place, and they expect to catch up after rainy-season delays with improvement in Q3 shipments.

"We continue to guide for 18 million tons, as per plan." — Genuino Christino (CFO)

Re-rollers' spare capacity

Q (Bastian Synagowitz · Deutsche Bank): He asked how much re-rolling capacity in Europe could ramp up to fill supply gaps while slabs are not yet in safeguards.

A: Management said they are not overly concerned about re-rollers; those businesses have established supply chains and will continue to operate. They declined to put a number on potential ramp capacity, and added they do not see a lot of spare rolling capacity in Europe that can be ramped up in the near term.

Sustainable solutions growth drivers

Q (Cole Hathorn · Jefferies): He asked what gives confidence in delivering $750 million of EBITDA in sustainable solutions and how steel plays a role in the transformation.

A: Management said the sustainable solutions division already runs at a greater than $500 million run rate and they are executing projects that will add profitability, including renewables in India and sustainable construction products across regions. They also said steel is fundamental to electrification and transmission build-outs and that their product portfolio fits those needs, supporting medium-term growth in the theme.

"We are already running the run rate, as you can see, it's already in excess of $500 million." — Genuino Christino (CFO)

India and JVs outlook

Q (Cole Hathorn · Jefferies): He asked for color on India and joint ventures into Q3 and Q4.

A: Management said Q2 performance in India was strong with a record level of shipments and a run rate of about 8 million tonnes. They expect the divisions to continue to do well in Q3 and Q4, are progressing the capacity doubling projects, and noted demand and prices have recovered from earlier lows supporting a strong H2.

"Our expectation is for the divisions to continue to do well in quarter three and quarter four." — Genuino Christino (CFO)