Motley Fool

Why ArcelorMittal Stock Crashed Today

Rich Smith, The Motley Fool
Fri, March 4, 2022, 4:58 PM

Shares of international steelmaking giant ArcelorMittal (NYSE: MT) closed Friday, trading down 8.9% after announcing that it will "idle its steelmaking operations in Kryvyi Rih, Ukraine in order to ensure the safety and security of our people and assets." Arcelor said that it had already been "evaluating the situation on a daily basis," however, and that "production had previously been reduced with the plant operating at a technical minimum (approximately one-third of its normal production levels)." Does that justify a near-9% haircut to Arcelor's stock price, though?

Actually, it might.

Consider: According to Arcelor's website, the Kryvyi Rih factory has a crude steel production capacity of 6.3 million tons, making it Arcelor's second-largest steel foundry in the world. That being said, we now know that it was actually producing only about 2.1 million tons at the time it was closed and, relative to the company's total manufacturing capacity around the world of 73.1 million tons, today's announcement actually only reduces total output at the company by about 2.9%.

{snip}