A must-read overview of ArcelorMittal, the global steel leader

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Sep. 3 2014, Published 10:53 a.m. ET

The global steel leader

With 119 million tonnes of annual capacity and an industrial presence in 22 countries spread across four continents, ArcelorMittal is the world’s largest steel manufacturer.

You can better understand its size from the fact that annual production in Japan—the second biggest steel producer—is less than the annual steel capacity of ArcelorMittal.

How ArcelorMittal took shape

ArcelorMittal was formed by the merger of Mittal steel and Arcelor in 2006. It’s based out of Luxembourg. The company is headed by Lakshmi N. Mittal, who’s the chief executive officer and chairman of the board of directors.

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ArcelorMittal has a successful track record of turning around sick and bankrupt companies. Since Mittal started his steelmaking enterprise as PT Ispat Indo, which was incorporated in Indonesia, he acquired several loss-making and sick steel companies, turned them around, and integrated them to give shape to the current enterprise.

Understanding the key markets of ArcelorMittal

ArcelorMittal has major operations in the developed markets of the North American Free Trade Agreement (or NAFTA) and Europe, which account for more than 75% of its revenues. It also has operations in Brazil, Africa, and the Commonwealth of Independent States (or CIS).

The company also owns captive iron ore and coal mines to fulfill its raw material requirements.

What do we cover in this series?

In this series, we’ll analyze how ArcelorMittal got into trouble over the past several years, which made the biggest steel maker a laggard on Wall Street. We’ll also discuss the factors that could lead to a turnaround for the company.

We’ll compare ArcelorMittal (MT) with other steel companies, like U.S. Steel (X), Steel Dynamics (STLD), and Nucor (NUE). These companies form the investment universe for the SPDR S&P Metals and Mining ETF (XME).

Next, we’ll look at what went wrong with ArcelorMittal. Let’s begin by looking at its share price movement in the next part of this series.

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