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ArcelorMittal & LanzaTech to Revolutionize Carbon Capture


ArcelorMittal MT has started constructing new premises at its site in Ghent, Belgium to build a new installation that will convert carbon-containing gas into bioethanol from its blast furnaces. In line with this, it has inked a long-term partnership deal with the Chicago-based LanzaTech, which pioneered the gas conversion process technology. LanzaTech’s licensed technology employs microbes that feed on carbon monoxide to produce bioethanol, which will then be used as transport fuel and potentially in plastics production.

The project is worth EUR 150 million and supports the decarbonization of the transport sector and also has the potential to revolutionize blast furnace carbon emissions capture. The company expects commissioning and first production by mid-2020.

Production of bioethanol at the Ghent facility is expected to reach roughly 80 million liters once the installation is complete. This is likely to yield an annual CO2 saving equivalent to putting 100,000 electrical cars on the road.

ArcelorMittal will be working with specialized partners to unveil this bioethanol technology. Notably, the funding to carry out further R&D and scaling-up the project was obtained from various sources, including the European Union’s Horizon 2020 program.

In July 2015, ArcelorMittal, LanzaTech and Primetals Technologies entered into partnership deal worth EUR 87 million to build Europe’s first-ever commercial scale production facility, which will produce bioethanol from waste gases created during the steelmaking process. The resulting bioethanol is capable of cutting greenhouse gas emissions by more than 80% compared with conventional fossil fuels.

ArcelorMittal’s shares have rallied 59.3% over the past year, outperforming the industry’s 37.7% growth.

The company, during first-quarter earnings call, stated that market conditions are favorable and demand environment remains positive along with healthy steel spreads. It continues to expect global apparent steel consumption to grow in the range of 1.5-2.5% in 2018.

In the United States, ArcelorMittal sees apparent steel consumption growth of 1.5-2.5% in 2018, factoring in higher construction and machinery demand. The company also anticipates 1-2% growth in apparent steel consumption in Europe on strength across construction and machinery end-use markets.

Moreover, apparent steel consumption is forecast to rise 6.5-7.5% in Brazil as the economy begins to turnaround with improved consumer confidence as construction recovers. Apparent steel consumption in China increased 3.5% in 2017 and is expected to remain close to this level this year as weakness in the real estate sector to be partly offset by strong infrastructure and automotive end markets.

ArcelorMittal Price and Consensus

ArcelorMittal Price and Consensus | ArcelorMittal Quote

Zacks Rank & Other Stocks to Consider

ArcelorMittal currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks worth considering in the basic materials space are FMC Corporation FMC, Westlake Chemical Corporation WLK and Celanese Corporation CE, each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp has an expected long-term earnings growth rate of 14.3%. Its shares have moved up 18.5% in a year.

Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 80% in a year.

Celanese has an expected long-term earnings growth rate of 8.9%. Its shares have gained 28.9% in a year.

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