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What Were the Key Drivers of ArcelorMittal’s 4Q16 Revenues?

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Feb. 13 2017, Published 11:11 a.m. ET

ArcelorMittal’s 4Q16 revenues

ArcelorMittal (MT) reported revenues of $14.1 billion in 4Q16. In contrast, it posted revenues of $14.5 billion in 4Q15 and $13.9 billion in 3Q16. ArcelorMittal’s 4Q16 revenues fell on a sequential basis and rose on a yearly basis.

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Steel shipments

We should note that steel companies’ revenues are basically a function of shipments and average selling prices. In 4Q16, ArcelorMittal’s steel shipments stood at 20.04 million metric tons. To put this in context, the company’s steel shipments stood at 19.73 million metric tons in 4Q15 and 20.31 million metric tons in 3Q16.

ArcelorMittal reported a 6.6% sequential decline in its 4Q16 NAFTA (North American Free Trade Agreement) shipments. The sequential decline in steel shipments is due to weak seasonal demand in the United States (DOW) (DIA). Notably, other steel companies including U.S. Steel Corporation (X), AK Steel (AKS), and Nucor (NUE) also reported a sequential decline in their US steel shipments.

ArcelorMittal’s ACIS (Africa and Commonwealth of Independent States) segment also reported a 9.2% sequential decline in steel shipments. Lower sequential steel shipments in these two markets were somewhat offset by a 1.6% and 3.3% respective increase in ArcelorMittal’s Europe and Brazil shipments.

Average selling price

ArcelorMittal reported an ASP (average selling price) of $589 per metric ton in 4Q16. To put this in context, the company reported an ASP of $569 per metric ton in 4Q15 and $601 per metric ton in 3Q16.

While ArcelorMittal’s 4Q16 revenues missed consensus estimates, the company managed to post better-than-expected profits in the quarter. We’ll discuss this more in the next part.

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