Dive Brief:
- Luxembourg-based steelmaker ArcelorMittal announced plans last week to build a $1.2 billion steel plant in Mobile County, Alabama.
- The facility is set to have capacity to produce 150,000 tons of non-grain-oriented electrical steel per year, serving customers across the electric vehicle industry.
- The plant will be operated by ArcelorMittal’s North American subsidiary and create 200 permanent jobs, according to a release. Construction is scheduled to begin later this year, with production set for 2027.
Dive Insight:
The new facility will be located near ArcelorMittal and Nippon Steel's joint venture project in Calvert, Alabama. Nippon agreed in October to sell its stake in the facility to ArcelorMittal, amid its bid at the time to buy U.S. Steel.
ArcelorMittal's facility plans came days before President Donald Trump's move to put a 25% tariff on all steel and aluminum imports.
The president’s initial announcement raised shares for U.S. steelmakers like Nucor, while hurting shares for foreign steelmakers like ArcelorMittal that would see their imports hurt by the duties.
ArcelorMittal is reacting to the changing geopolitical climate with an increased focus on U.S. capacity. The Alabama project replaced the company's plans for a $460 million expansion of its Minas Gerais, Brazil, facility, CEO Aditya Mittal said on a Feb. 6 earnings call.
"I think you can expect developments like that where we see the market is changing or we can be more agile and dynamic in allocating where we want to invest our capital," Mittal said on the call.
Mittal said the company is prepared to deal with the revenue impacts of tariffs, something it weathered during Trump's first term. The CEO noted that the upcoming capacity from the Alabama plant could "basically" cover the volume ArcelorMittal currently imports from places like Mexico.
When Trump imposed steel tariffs in 2018, it cost the company roughly $100 million per quarter, according to Mittal. If Trump imposes the 25% tariff on Mexico, ArcelorMittal could shift slab imports from the country to Brazil, EVP and CFO Genuino Christino told Reuters.
