ArcelorMittal expects the combination of the EU Carbon Border Adjustment Mechanism and the revised tariff-rate quota system to reduce steel imports, raise domestic capacity utilisation and support mill profitability.
The company estimates that EU steel imports could fall by approximately 13 million tonnes compared with 2025, declining to around 10 million tonnes from about 22 million tonnes.
The impact is expected to be particularly significant for flat steel. ArcelorMittal said the five largest suppliers of HRC to the EU face combined quota reductions of approximately 60%. HRC accounted for 43% of the region’s flat-steel imports in 2025.
Lower quota availability, together with the 50% tariff applied to volumes exceeding the relevant allocation, is likely to make import purchasing more difficult and less predictable. Buyers may become increasingly reluctant to book distant cargoes where quota access, customs clearance and carbon-related costs remain uncertain, strengthening the position of domestic European mills.
ArcelorMittal’s European EBITDA per tonne increased by $28 quarter on quarter during the second quarter, primarily because of an improved price-cost effect. The increase was recorded before the revised quota framework took effect on July 1, indicating that European steel spreads had already begun to strengthen ahead of the expected tightening in import supply.
The sustainability of the HRC recovery will depend on whether the volume removed from the import market exceeds the additional steel produced as European mills restore idled capacity.
ArcelorMittal has already restarted blast furnaces in Poland, Spain and France in response to improving order books and margins. If import displacement remains greater than the increase in domestic production, European utilisation rates, HRC offers, and mill spreads could remain supported through the second half of the year.
However, faster-than-expected capacity restoration without a corresponding improvement in end-user consumption could limit further price increases. The tightening created by trade measures could therefore initially support HRC prices, but the duration of that support will depend on how quickly domestic supply returns.
The impact will also extend beyond the European market. Exporters losing access to EU quotas are unlikely to remove those volumes from the seaborne trade. Instead, suppliers may redirect HRC toward Southeast Asia, the Middle East and other accessible destinations.
This could create a widening regional price divergence. European HRC prices may remain supported by reduced import availability, while export prices in Asia and other price-sensitive markets face greater pressure as displaced tonnes compete for limited demand.
CBAM adds another layer of cost and compliance for imported steel. ArcelorMittal expects the mechanism to support European prices by requiring importers to account for embedded carbon emissions.
Its actual pricing effect will depend on carbon values, verified emissions levels and exporters’ ability to provide the required documentation. Nevertheless, CBAM raises the delivered cost and administrative burden of supplying the EU, reinforcing the broader shift toward regional steel production and trade.
European furnace restarts point to stronger order books
ArcelorMittal restarted the blast furnace at Dąbrowa Górnicza in Poland on April 28 after it had been idled since September 2025.
The Asturias blast furnace in Spain returned to full operation during the second quarter following maintenance, while the Fos-sur-Mer blast furnace in France restarted at the end of July after remaining idle since September 2023.
The return of the three furnaces indicates that the company is responding to stronger orders and better spreads by increasing production rather than continuing aggressive supply restraint.
Additional European supply is expected from the new electric-arc furnace at Gijón and the expanded Sestao flat-steel operation following commissioning.
ArcelorMittal expects its European steel shipments to remain stable or increase sequentially during the third quarter. This contrasts with the high-single-digit decline typically recorded during the European summer period.
Avoiding the normal seasonal reduction would suggest that tighter import availability is already transferring orders toward domestic mills, even while demand from major steel-consuming sectors remains mixed.
The company also expects total shipments across all operating segments to be higher in the second half of 2026 than in the first half.
Higher spreads drive faster EBITDA growth than shipments
Against the backdrop of improving regional steel spreads, ArcelorMittal produced 14.3 million tonnes of crude steel in the second quarter of 2026, up 7.5% from 13.3 million tonnes in the previous quarter.
Production remained marginally below the 14.4 million tonnes recorded in the second quarter of 2025.
Steel shipments rose 4.7% quarter on quarter to 13.4 million tonnes from 12.8 million tonnes but remained 2.9% below the year-earlier level of 13.8 million tonnes.
The sequential increase in production and shipments reflects improving operating conditions, but volumes have not yet returned to their 2025 level. This suggests that ArcelorMittal’s earnings improvement was primarily margin-led rather than the result of a broad-based recovery in steel demand.
Sales increased to $16.76 billion from $15.46 billion in the first quarter and $15.93 billion a year earlier.
EBITDA rose 22.9% quarter on quarter to $2.06 billion from $1.68 billion and was 11% higher than $1.86 billion in the second quarter of 2025.
EBITDA per tonne increased to $155 from $131 in the previous quarter and $135 a year earlier.
The substantially faster increase in EBITDA than shipments points to an improved price-cost balance. While shipments rose by less than 5%, EBITDA increased by almost 23%, indicating that stronger steel spreads and product mix were more important to the quarterly recovery than volumes alone.
Operating income increased to $1.06 billion from $753 million in the first quarter, while net income attributable to shareholders stood at $683 million.
First-half earnings improve despite lower steel volumes
ArcelorMittal produced 27.6 million tonnes of crude steel during the first half of 2026, down 5.5% from 29.2 million tonnes in the corresponding period of 2025.
Steel shipments declined 4.4% year on year to 26.2 million tonnes from 27.4 million tonnes.
Despite selling less steel, first-half sales increased 4.9% to $32.22 billion from $30.72 billion.
EBITDA rose 8.8% to $3.74 billion from $3.44 billion, while EBITDA per tonne increased 14.4% to $143 from $125.
The divergence between lower steel volumes and higher EBITDA shows that improved pricing, spreads and portfolio composition offset the decline in shipments. ArcelorMittal generated more earnings per tonne even as its overall steel deliveries remained below the previous year.
North America moves toward greater slab self-sufficiency
North American EBITDA increased quarter-on-quarter, supported by higher steel shipments and a positive price-cost effect.
ArcelorMittal’s new electric-arc furnace at Calvert, Alabama, continued to ramp up and is expected to reach full capacity in the second half of 2026.
The furnace has an annual capacity of 1.5 million tonnes and will supply domestically melted and poured steel to Calvert’s downstream rolling facilities.
The ramp-up will reduce Calvert’s reliance on externally sourced slabs and increase the share of locally produced feedstock used in higher-value flat steel. This is increasingly important in a North American market shaped by tariffs, local-content requirements and demand for domestically produced automotive grades.
Greater upstream integration should also give ArcelorMittal more control over production costs and slab availability.
Pecém HRC plan could reduce Brazilian slab availability
Brazilian EBITDA increased sequentially, supported by improved steel spreads and higher shipments.
ArcelorMittal is evaluating a 3 million-tonne-per-year HRC line at Pecém. The project would allow the company to convert a larger share of its slab output into finished flat steel.
The proposed line would increase value addition and reduce dependence on the merchant slab market. It could also affect Brazilian slab export availability if more semi-finished material is retained for internal rolling.
The market impact would depend on the project timetable and regional flat-steel demand, but additional downstream capacity could gradually shift Pecém from a slab-focused operation toward a more integrated flat-steel producer.
AM/NS India delivers simultaneous volume and margin growth
AM/NS India shipped a record 3.92 million tonnes of steel during the first half of 2026, up 7% from 3.66 million tonnes a year earlier.
First-half EBITDA increased to approximately $500 million from $300 million, while EBITDA per tonne rose 40% to $115 from $82.
Unlike ArcelorMittal’s consolidated first-half performance, where shipments declined but margins improved, AM/NS India delivered growth in both volumes and earnings per tonne.
The figures indicate that the Indian operation benefited from stronger steel spreads while raising deliveries, making India one of the company’s clearest growth markets.
ArcelorMittal expects Indian apparent steel consumption to increase by 6-8% in 2026.
AM/NS India’s Hazira expansion is intended to raise capacity to 15 million tonnes per year by 2027. Newly commissioned downstream facilities have also increased its ability to produce value-added steel for automotive, appliances, infrastructure and other end-use sectors.
ArcelorMittal expects the completed Hazira expansion to increase AM/NS India’s normalised EBITDA and investable cash flow by approximately 2.5 times, to around $2.5 billion and $1.7 billion, respectively.
The company has also announced the first 8.2 million-tonne-per-year phase of a proposed integrated steel plant in Andhra Pradesh.
Together with a potential expansion of Hazira to 24 million tonnes and further phases in Andhra Pradesh, ArcelorMittal sees a pathway to more than 40 million tonnes of Indian steelmaking capacity by 2040.
The expansion reflects confidence in long-term Indian consumption growth, but it also points to a substantial increase in domestic supply. As capacity rises, Indian producers may need to become more active in export markets during periods when domestic demand is insufficient to maintain high utilisation.
Access to Europe may become more difficult because of reduced quotas and CBAM-related costs. Southeast Asia and the Middle East could therefore become increasingly important outlets for Indian and other Asian mills, adding to competitive pressure in those markets.
Iron ore output rises as Liberia expansion ramps up
ArcelorMittal’s iron ore production increased to 13.5 million tonnes in the second quarter from 12.9 million tonnes in the first quarter and 11.8 million tonnes a year earlier.
First-half iron ore production rose 11.9% year on year to 26.4 million tonnes from 23.6 million tonnes.
Production from ArcelorMittal Mines Canada and Liberia increased to 19.8 million tonnes during the first half from 16.7 million tonnes, while shipments rose to 19.4 million tonnes from 17.9 million tonnes.
The increase strengthens the company’s raw-material integration and provides greater control over steelmaking costs at a time when international trade is becoming more regionalised.
ArcelorMittal maintained its guidance for 18 million tonnes of iron ore shipments from Liberia during 2026. The expansion of the Liberian operation to 20 million tonnes per year remains in the ramp-up phase, with expanded rail and port infrastructure already commissioned.
At normalised long-term iron ore prices and operating costs, the company expects the expanded Liberian operation to contribute approximately $450 million in EBITDA, including $200 million already captured in 2025.
Mining EBITDA nevertheless declined sequentially during the second quarter, mainly because of lower shipments and higher freight costs.
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