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ArcelorMittal (MT -3.6%) plunges as much as 4% after Goldman Sachs downgrades shares to Neutral from Buy to "reflect deteriorating steel spreads, a function of falling steel prices and elevated input costs."
Goldman analysts continue to like ArcelorMittal's healthy balance and the prospect of strong free cash flow, but they say the latest spreads, combined with ongoing concerns on peak global growth and a lack of near-term catalysts, justify a downgrade.
The firm estimates the company's shipments will rise 2% in 2022 with E.U./U.S. hot-rolled coil prices of €750 and $1100/ton, fading to €600 and $770/ton in 2023.
Steel names have been falling in recent days, exacerbated by a warning from Stelco CEO Alan Kestenbaum of "significant oversupply and significant shrinkage of demand" affecting the industry.