ArcelorMittal SA (NYSE:MT) has moved to improve the efficiency and energy performance of its steel manufacturing process with the signing of two long-term renewal contracts for the purchase of oxygen nitrogen and argon with Air Liquide. The agreement is for the supply of industrial gas into the company’s manufacturing facilities in France.
ArcelorMittal-Air Liquide Agreement
Air Liquide has since announced plans to extend its pipeline into ArcelorMittal’s manufacturing facilities in Fos-sur-Mer and Dunkirk that are showing growing needs for industrial gasses. The industrial gas supplier currently operates the most extensive gas pipeline in Europe as it boasts of consistency, performance, and supply flexibility.
The gas supplier has also reached an agreement to supply industrial gas to ArcelorMittal’s production facilities in Ghent Belgium. Increased usage of Industrial gas in ArcelorMittal’s manufacturing process is part of a larger plan that seeks to reduce atmospheric emissions in addition to helping improve efficiency in the plants.
The signing of the agreements could not have come at a better time, given that ArcelorMittal’s high value-added steel is in high demand. The company’s steel is currently being used in the automotive, construction and packaging industries among other industrial applications.
Demand for industrial gas is slowly picking up as companies continue to embrace green energy solutions, able to combat climate change. The same is helping provide support for the natural resource price that plunged last year in line with the crash in oil prices.
ArcelorMittal Stock Performance
ArcelorMittal remains one of the top performers in the industry, seen by its stock soaring by 42.5% over the last six months as demand for industrial steel slowly picks up. The stock’s sentiments on the street have mostly been supported by the company’s focus on lowering debt as well as costs of operation.
Lower capital spending last year means the company is on course to register $1 billion in savings for the 2016 fiscal year, having posted a net income of $680 million in the third quarter.
ArcelorMittal stock was up by 7.86% in Tuesday trading session, consequently ending the day at highs of $8.10 a share.