Must-know: ArcelorMittal’s key segments and markets

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Jul. 14 2014, Updated 1:28 p.m. ET

Key segments for ArcelorMittal

As you have seen so far, ArcelorMittal (MT) is the global leader in steel production. Steel remains a major industrial raw material, and is consumed by many industries. ArcelorMittal supplies its products to the following key segments:

  • Construction – ArcelorMittal is the leading global supplier of steel for construction. It produces a wide range of construction solutions like rebars, beams, bridge girders, and roofing.
  • Automotive –  About 20% of global car production is made with ArcelorMittal steel. In 2012, its automotive division generated $13.2 billion in revenues.
  • Domestic Appliances – The company produces specific grades of flat steel products for use in appliances like refrigerators and ovens. It supplies its products to major manufacturers like Bosch Siemens, Electrolux, Whirlpool, Indesit, and Miele.
  • Energy – It supplies the energy sector with a range of high-performance steel products and services. It supplies steel to both renewable and non-renewable energy producers.

The key markets for ArcelorMittal

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As the previous chart shows ArcelorMittal gets three fourths of its revenues from Europe and the North America free trade agreement (or NAFTA). Other markets include Brazil and Africa and the Commonwealth of Independent States (or ACIS). Mining remains the most profitable segment for the company. It contributes 29% to its earnings before interest, taxes, depreciation, and amortization (or EBITDA), with only 7% revenue.

While ArcelorMittal has global operations, investors can also consider companies and exchange-traded funds (or ETF’s) like United States Steel Corporation (X), Nucor Corporation (NUE), and Reliance Steel & Aluminum (RS), and the SPDR S&P Metals and Mining ETF (XME) which are more focused on U.S. markets.

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