ArcelorMittal (NYSE:MT) is about to release earnings. Ponder this Bear Case Scenario as you contemplate management comments:
ArcelorMittal maintains a significant debt burden. Deleveraging efforts reduce the probability that management will recommend dividend increases or share repurchases. The bank owns the joint.
The global steel industry is highly fragmented. Even as the largest steelmaker in the world, ArcelorMittal only has about a 6% market share. No one is dominant. not sure if governments will allow any one firm to become dominant.
About one-third of ArcelorMittal facilities are in the highest quartile of costs. The likelihood of significantly moving the dial on costs is low; very low. Therefore margins will be an Achilles Heel.
George Gutowski writes from a caveat emptor perspective.