VLPNY - ArcelorMittal: Macro Risks Weigh Heavily On An Improved Story

• ArcelorMittal has temporarily idled its Ukrainian steel operations, and the company's steel and iron operations in Ukraine account for 6%-9% of total EBITDA.
• Ukraine and Russia are major steel suppliers to the EU; lower output could help establish a floor for steel prices, while higher energy prices are pressuring marginal suppliers.
• Healthy demand should support pricing in North America and the EU after recent weakness, but margins are still likely to be lower.
• ArcelorMittal shares look undervalued below the low-to-mid-$40s, but there are outsized company-specific risks, and investor sentiment could still be tricky given likely long-term margin declines from 2021 onward.

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