ArcelorMittal NYSE: MT reported improving operating momentum in the second quarter and said it expects progress to continue through the second half of 2026, supported by stronger European order books, production restarts and strategic growth investments.
Group CFO Genuino Christino said second-quarter EBITDA rose to $2.1 billion, representing $155 per ton. The company’s European segment generated EBITDA of $98 per ton, a three-year high, as market conditions and the policy environment improved.
Christino also said the company recorded its lowest-ever lost-time injury frequency rate during the first six months of the year. While calling the safety progress encouraging, he said ArcelorMittal remains focused on further improvement.
European production and order books strengthen
ArcelorMittal said customer engagement and order books have improved in Europe, where it is already booking orders for the fourth quarter. The company has restarted production in Spain, Poland and France and expects to have its full suite of European blast furnaces operating from the third quarter.
Management guided for third-quarter shipments to be stable to higher than second-quarter levels, an outcome Christino characterized as counterseasonal. He said steel prices have not followed the typical pre-summer downward trend, while tariff-rate quota, or TRQ, measures are expected to reduce imports and allow the company to regain market share.
“We are booking right now already for quarter four,” Christino said in response to a question from Morgan Stanley analyst Alain Gabriel. “It’s all playing out very, very well.”
While restarting facilities will increase carbon costs, Christino said higher capacity utilization and fixed-cost absorption should more than offset those costs. He said the additional tons brought back into production are expected to be more profitable than current output.
The company said European demand itself has remained broadly stable rather than materially improving. Christino said the expected reduction in imports under the TRQ regime is the principal driver of the anticipated shipment gains. He added that ArcelorMittal does not view inventory levels in Europe as excessive.
Daniel Fairclough of ArcelorMittal’s investor relations team said recent European policy actions, including the carbon border adjustment mechanism, the new TRQ tool and proposed changes to the EU Emissions Trading System, represent important steps toward supporting industrial competitiveness alongside decarbonization. He said the company continues to engage with policymakers on the balance between carbon costs and the conditions needed for large-scale decarbonization investment.
Cash flow, capital allocation and growth projects
Underlying free cash flow in the first half annualized at $2.5 billion, excluding seasonal working-capital investments and strategic growth capital expenditures, according to Christino. The company reiterated its expectation for positive free cash flow for the full year and beyond, citing anticipated working-capital benefits and higher profitability in the second half.
ArcelorMittal said its strategic growth projects are expected to contribute $1.8 billion of incremental EBITDA from 2026 onward. Of that amount, management expects $700 million in 2026, including $300 million captured in the first half and another $400 million expected in the second half.
The company highlighted growth options in India, Brazil, the U.S. and Liberia. In India, ArcelorMittal has a long-term plan to expand capacity to 40 million tons annually. Management said India demand remains strong, prices have recovered from lows at the beginning of the year and the India and joint ventures segment should continue to perform well during the second half.
In Brazil, ArcelorMittal is evaluating downstream opportunities that would use its low-cost assets and slab position to produce higher-value products. In the U.S., it is continuing detailed engineering work for a possible second electric arc furnace, or EAF, at Calvert. The existing Calvert EAF is expected to reach full capacity later in the second half, while the company’s electrical steels project there is progressing as planned.
Management said it will bring projects to its board once engineering work is completed and it has identified economically attractive solutions. Christino said investments must compete for capital and generate returns above the company’s cost of capital.
North America policy and decarbonization outlook
Fairclough said ArcelorMittal supports greater trade-policy alignment across the U.S., Canada and Mexico. He said any expansion of Section 232-style protections across the USMCA region could benefit the company’s North American operations by reducing tariff-related costs and addressing Mexico’s comparatively high import penetration.
On European decarbonization, Christino said the company’s immediate focus remains its EAF project in Dunkirk. He said the conditions for additional direct reduced iron capacity in Europe are not currently in place because of gas prices, hydrogen availability and the economics of such projects.
“We will invest when it makes economic sense, when we can earn a decent return on our capital,” Christino said.
ArcelorMittal also highlighted its Sustainable Solutions business, which it said is operating at an EBITDA run rate above $500 million and is targeting $750 million of medium-term EBITDA. Management cited renewable-energy investments in India and expansion of its sustainable construction products business in Europe, India, the U.S. and Brazil as key contributors.
The company said electrification, renewable generation, transmission infrastructure, data centers, defense spending and infrastructure investment are long-term demand drivers for steel. Fairclough said ArcelorMittal estimates that nearly 300 million tons of steel, excluding China, could be required through 2035 to support projected electrification goals.
About ArcelorMittal (NYSE:MT)
ArcelorMittal is a multinational steel manufacturing company formed in 2006 through the merger of Arcelor and Mittal Steel. Headquartered in Luxembourg, the company is one of the world's largest producers of steel and operates an integrated value chain that spans raw material extraction, steelmaking, processing and distribution. Its product portfolio includes flat and long carbon steel products, coated and specialty steels, tubular products and value-added solutions tailored for sectors such as automotive, construction, household appliances, energy and packaging.
ArcelorMittal's operations are global in scope, with production facilities, distribution networks and commercial activities across Europe, the Americas, Asia, Africa and the Commonwealth of Independent States.
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