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Behind ArcelorMittal’s 1Q17 Call: What the Market Is Eager to Hear

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Nov. 20 2020, Updated 3:12 p.m. ET

ArcelorMittal’s 1Q17 call

Now that we’ve looked at analysts’ estimates for ArcelorMittal’s (MT) 1Q17 earnings, let’s analyze the key updates that markets will be waiting to hear about in the company’s 1Q17 earnings call.

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Industry outlook

For steel companies such as U.S. Steel (X) and Nucor (NUE), the industry outlook is as important—if not more important—than their positions in the industry.

During its 1Q17 earnings call, the market will look for ArcelorMittal’s commentary on the steel price outlook (GNR). Notably, we’ve seen a steep fall in seaborne iron ore and Chinese steel prices over the past couple of weeks. So far, these factors haven’t had a big impact on US and international prices, but we could see some repercussions if Chinese steel prices trend further downward.

US-based steel companies including Nucor and Steel Dynamics (STLD) sounded positive about the US steel industry’s outlook in their most recent conference calls. However, as a steelmaker with a global imprint, ArcelorMittal’s fortunes are more closely tied to global dynamics than US-based steel makers. During the 1Q17 call, markets will likely watch ArcelorMittal’s views of the global steel industry’s outlook, particularly in light of the recent volatility in Chinese steel prices.

Automotive industry

Markets will also look for clues on the automobile industry’s outlook during ArcelorMittal’s 1Q17 call. We should remember that ArcelorMittal is the leading global supplier to the automotive sector. There have been concerns over the auto sector’s steel demand, especially in the US, and we saw a yearly decline in US auto sales in 1Q17. The April auto sales numbers of leading automakers like General Motors and Ford further dampened market sentiments.

Notably, AK Steel (AKS), which gets the majority of its revenues from the automotive sector, sounded positive in its latest business outlook, despite the slowdown in auto sales.

You can read Why AK Steel Is Optimistic despite a Slowdown in Auto Sales to explore this question further.

In the meantime, visit Market Realist’s Steel page for ongoing updates on the industry.

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