ArcelorMittal South Africa is winding down its Longs Business due to challenges, leading to job losses

From Nasdaq: 2025-01-06 13:43:00

ArcelorMittal South Africa is winding down its Longs Business due to challenges like weak economic growth and high costs. This decision will impact 3,500 jobs and is a result of low-cost steel imports from China. The company expects a significant decline in earnings for 2024. MT stock has dropped 20.4% in the past year.

The decision to wind down the Longs Business is a response to record-high Chinese steel exports affecting global prices. This move will transition the business into care and maintenance by early 2025. The decision is driven by weak domestic markets and overcapacity in steel production. ArcelorMittal South Africa anticipates a decline in earnings for 2024.

ArcelorMittal South Africa’s decision will directly impact employees and suppliers, with job losses and reduced operations. The company will work to minimize impacts and realign its working capital facility. The company’s earnings for 2024 are projected to decrease significantly, with revenues expected to decline by more than 5% year over year. MT stock has seen a 20.4% decline in the past year.

MT stock currently holds a Zacks Rank #3 (Hold). Other better-ranked stocks in the Basic Materials sector include GROY, MAG, and FSM. GROY and MAG have a Zacks Rank #1 (Strong Buy), while FSM carries a Zacks Rank #2 (Buy). These stocks have shown positive earnings growth and performance in the past year.

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