ArcelorMittal Investing $15M in Brazil - Analyst Blog

Steel giant ArcelorMittal MT announced that it is investing around $15 million at its Vega do Sul flat steel rolling mill in the state of Santa Catarina in southern Brazil. The company will invest to produce high strength steel, known as Usibor, which will be mainly used in the he automotive industry.

The plants' existing equipments will produce Usibor, a press hardened boron steel with an aluminium-silicon coating. Usibor is one of the major products of ArcelorMittal's S-in motion steel solutions catalogue that offers more than 60 solutions.

The product helps to reduce the weight of the body-in-weight by up to 20% compared to a reference C-segment car. The manufacturers can create lighter, safer and more eco-friendly vehicles by using Usibor. Usibor usage also allows the vehicles to be made at reasonable costs. Production at the Vega do Sul is expected to start in the second quarter of 2015.

Usibor is used primarily for the production of structural parts including A-pillars, B-pillars, frontal and rear bumpers, various types of rails, and the tunnel floor and is one of the most resistant steels used in automotive applications with strength of 1,500 MPa after hot-stamping.

ArcelorMittal's investment in the Brazilian facility is in sync with the Inovar-Auto stimulus programme, which encourages the automakers to invest in the Brazilian automotive industry and also reaffirms the company's commitment to Brazil as a key market. The company is working with the customers in Brazil to resolve their technological and geographical challenges.

ArcelorMittal is a Zacks Rank #3 (Hold) stock.

Other companies in the steel and related industries with favorable Zacks Rank are AK Steel Holding Corp. AKS, United States Steel Corp. X and Worthington Industries, Inc. WOR. While AK Steel holds a Zacks Rank #1 (Strong Buy), United States Steel and Worthington Industries retain a Zacks Rank #2 (Buy).