What's Next After ArcelorMittal's 73% Surge?

Core Insights - ArcelorMittal has experienced a nearly 73% increase in stock price since the beginning of the year, driven by stronger earnings, improved market conditions, and a defined capital-return strategy, while facing risks related to demand, tariffs, and the steel cycle [2][13] Financial Performance - In Q3 2025, ArcelorMittal reported revenue of $15.66 billion, steel shipments of 13.6 million tons, and net income of $377 million, supported by solid performance in iron ore and wider spreads in Europe and Brazil [4] - The company maintains a strong liquidity position of approximately $11.2 billion and has committed to returning at least 50% of post-dividend free cash flow to shareholders, alongside ongoing buybacks through 2025 [5] Market Positioning - The strengthened Carbon Border Adjustment Mechanism (CBAM) and Steel & Metals Action Plan from the EU have enhanced confidence in long-term European steel demand and pricing [6] - ArcelorMittal is strategically advancing its green-steel roadmap and investing in hydrogen-ready Electric Arc Furnaces (EAF), positioning itself for future demand from low-carbon steel markets [7] Risks and Challenges - Net debt has increased to $9.1 billion due to working capital buildup, with a significant unwind expected in Q4 to recover free cash flow [8] - The company faces uncertainties related to tariffs, trade flows, and energy costs, which could impact steel margins and overall market sentiment [9] - Demand projections for 2025 have been revised down, with potential threats from weak U.S. construction and a sluggish automotive recovery, alongside rising global oversupply [10] - Execution risks related to decarbonization and large-scale capital projects could influence returns and limit capital allocation flexibility [11][12]