Steel giant, ArcelorMittal MT declared that it has invested $11.1 million into its leading tubular facility in Monterrey, Mexico. The investment, made to increase product capabilities for the North American automotive market, is in sync with the company’s strategy to expand its foothold in the automotive sector that continues to show significant growth, both in Mexico and the southeastern U.S.

This investment will be made toward the construction of an additional world-class tube mill and addition of downstream value-add processing equipment that will allow the facility to supply high-quality straight and formed tubes. These will be utilized for the production of automotive seating and head rest applications. A cold-sizing welding process enables the plant to meet the highest-quality non-destructive testing requirements.

Construction has begun and is expected to be completed in 2016. Once the construction is complete, the facility will make electric resistance welded (ERW) tubes ranging from 11mm to 165mm in a variety of steel thicknesses and steel grades – from mild carbon designs, to advanced high-strength steels (AHSS) popular in the automotive industry. The expansion will create more than 80 new positions.

With this investment, ArcelorMittal’s product portfolio will increase for demanding applications at Monterrey, including tubular products such as hydroform tubes, drive shafts, rectangular, rounds and specialized shapes.

ArcelorMittal’s shares closed roughly 4.8% lower at $5.58 last Friday. The stock is down around 50% so far this year.

ArcelorMittal currently carries a Zacks Rank #3 (Hold).
 
Some better-ranked companies in the basic materials sector are Nippon Steel and Sumitomo Metal Corporation NSSMY, ThyssenKrupp AG TYEKF and Asanko Gold Inc. AKG, each carrying a Zacks Rank #2 (Buy).
 
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