ArcelorMittal MT, has raised its estimate of the financial impact from U.S. tariffs and now expects them to reduce its core profit by $150 million this year, more than the $100 million it forecast in February.

The world’s second-largest steelmaker is responding by deepening its manufacturing in the U.S., its finance chief Genuino Christino said on Thursday.

“What we supply to the United States from Canada is high value-added material that cannot be easily replaced,” Christino said in an interview. “Our focus is to work with customers to make sure we can continue to supply, protect market share and still make a margin.”

The company was pursuing several options, including sharing tariffs with customers and cutting costs, he added.

ArcelorMittal is also moving to expand its U.S. footprint. In June, it finalized the acquisition of Nippon Steel’s 5401 50% stake in the Calvert joint venture, taking full control of the Alabama-based facility. Christino said the deal is set to transform the group’s presence in the market.

ArcelorMittal has successfully commissioned Calvert’s new electric-arc furnace, the CFO added. It has capacity to produce 1.5 million metric tonnes of low CO2 steel per year and it is designed to produce exposed automotive-grade steel.

As part of the transaction, ArcelorMittal signed in June a seven-year slab supply agreement with Nippon Steel and U.S. Steel, under which the Luxembourg-based group will receive an average of 750,000 metric tonnes per year of slabs melted and poured in the U.S.

Together, the new furnace and the slab supply deal mean that roughly half of Calvert’s production will qualify as U.S.-melted and poured, Christino said. The remainder will continue to be sourced from Brazil and Mexico.
Source: Reuters