Deferred Dreams & Dunkirk Doldrums

In a striking testament to the fragility of Europe’s industrial decarbonization push, ArcelorMittal has announced the suspension of its high-profile Dunkirk DRI & hydrogen project. Speaking candidly before France’s lower house finance committee, ArcelorMittal France CEO Alain Le Grix de la Salle described the investment as "currently unprofitable" given today's volatile conditions. “It is impossible to build a credible economic model today," he confessed, his words echoing throughout the chamber. Originally, this €1.8 billion plan, partly funded through an €850 million agreement signed in 2023 with the French Agency for Energy Transition ADEME, aimed to establish a modern DRI unit & two electric arc furnaces, radically reducing CO₂ emissions by switching from traditional blast furnaces to hydrogen-powered steelmaking. But even these forward-looking plans proved vulnerable to economic headwinds. De la Salle emphasized that the suspension is not rooted in a lack of climate commitment, but in market reality: “We do not abandon our ambition. We postpone because the numbers simply do not work today.”

Fiscal Foibles & Futile Forecasts

The Dunkirk project, celebrated as a milestone in European climate strategy, depended on assumptions now undermined by real-world events. Analysts note that hydrogen prices, once expected to fall rapidly, remain several times higher than natural gas, while electricity costs in France, though cushioned by state intervention, are still among Europe’s steepest. “Energy markets are unpredictable, & this affects every long-term industrial investment,” de la Salle elaborated. Compounding matters, international competitors operating in less regulated markets continue to produce cheaper, carbon-intensive steel, weakening Europe's competitive edge. Trade instruments like the Carbon Border Adjustment Mechanism, meant to level the playing field, have been delayed, leaving European producers exposed to underpriced imports. “Without robust border protections, our low-carbon steel will be priced out,” said Luc Moreau, a Paris-based industry analyst. In this turbulent environment, even generous public financing could not de-risk the Dunkirk venture enough to justify its enormous capital outlay.

Green Hydrogen Hopes & Grim Headwinds

Hydrogen has long been lauded as steel’s sine qua non for deep decarbonization, yet reality has proven more recalcitrant. The Dunkirk project relied on starting production with natural gas, then transitioning to low-carbon hydrogen once supply matured, a stepwise model endorsed by ADEME. But the high cost of electrolyzer-produced green hydrogen, limited infrastructure, & slow progress in large-scale projects quickly shattered financial projections. “Even our phased plan cannot withstand current hydrogen prices,” admitted de la Salle, describing how soaring input costs turned optimism into risk. Meanwhile, broader industrial hydrogen roadmaps across Europe remain in early pilot stages, hindered by grid bottlenecks & insufficient renewable capacity. Dunkirk’s cancellation underscores this: until hydrogen becomes cost-competitive, its role in heavy industry will remain aspirational. As de la Salle summarized, “Hydrogen is essential, but it is not yet economically viable for industrial-scale steelmaking.”

Subsidies, Sanctions & Supply Sclerosis

Beyond energy economics, geopolitical & regulatory delays also throttled Dunkirk’s promise. The €850 million ADEME funding agreement was conditional: the DRI plant must switch entirely to green or low-carbon hydrogen in the long term, a milestone now slipping beyond the investment horizon. Meanwhile, European steelmakers face growing frustration over slow CBAM rollout & limited trade defense measures, allowing cheaper, carbon-heavy imports to flood the market. “Decarbonization must come with effective trade policy, or we lose market share,” warned de la Salle, echoing industry fears. Simultaneously, Europe’s cautious approach to fossil fuel subsidies & the rapid push for carbon neutrality left companies caught between activist demands & shareholder scrutiny. Vincent Leroux, an energy economist at Sciences Po, observed, “It’s a policy paradox: regulators push industry to decarbonize but delay tools that would protect them in global markets.”

ArcelorMittal’s Adaptive Ambivalence & Ambitions

Despite freezing the DRI plan, ArcelorMittal insists it is not withdrawing entirely. The company still intends to build the first of two planned electric arc furnaces in Dunkirk at a cost of €1.2 billion, which would reduce emissions by substituting scrap steel for raw iron ore. “We remain committed to greener production, but in a phased, realistic way,” de la Salle explained, describing this shift as "recalibration rather than capitulation." The furnace is targeted to start production by late 2028 or early 2029, though the final investment decision is deferred until this summer. Critics argue that without the DRI unit, the full decarbonization strategy is incomplete. Yet the decision reflects a pragmatic trade-off: preserve some environmental gains without risking financial collapse. Notably, ArcelorMittal continues other decarbonization projects in Spain & Belgium, reaffirming partial momentum despite Dunkirk’s setback.

Hegemonic Hydrogen & Hindered Horizons

The Dunkirk decision also highlights a broader European dilemma: the continent aims to lead in green steel yet faces fierce competition from regions enjoying cheaper energy & larger state subsidies. Hydrogen, envisioned as the hegemonic fuel of tomorrow, remains in short supply & at prohibitively high prices, especially compared to fossil-based alternatives in Asia or North America. “Europe risks becoming uncompetitive unless it reconciles climate ambition & industrial policy,” argued Claire Dubois from Paris School of Economics. Meanwhile, China, India & the United States aggressively expand production capacity, further squeezing European margins. As de la Salle summarized, “We cannot invest billions in plants that may become stranded assets before hydrogen becomes affordable.” Dunkirk’s halt, then, is not just about one French town, but an inflection point in Europe’s industrial strategy.

Obfuscated Objectives & Operational Overhangs

Behind the headlines lies a cautionary tale of mismatched timelines & over-optimistic modelling. The Dunkirk project depended on rapid hydrogen price declines & swift infrastructure deployment, assumptions many now view as unrealistic. “Steel plants have life cycles measured in decades; political timetables do not,” noted Leroux, underlining the clash of industrial & policy planning. Local officials in Dunkirk, who anticipated new jobs & economic revival, now face uncertainty. Contractors & suppliers who had mobilized resources must reassess plans. Moreover, the delay risks reputational damage to both ArcelorMittal & the European Green Deal itself, once promoted as proof of global climate leadership. As Dubois observed, “Dunkirk’s pause is symbolic: decarbonization cannot rely on optimism alone.”

Sine Qua Non of Sustainable Steel & Strategic Shifts

Yet ArcelorMittal & industry peers broadly agree on one point: decarbonization remains the sine qua non for future survival in Europe. Despite Dunkirk’s setback, the company still pursues pilot hydrogen projects, scrap-based production, & renewable-powered furnaces in Germany, Belgium & Spain. De la Salle calls for a “balanced, realistic pathway,” blending public support, trade protection & phased technology rollout. Industry groups demand accelerated CBAM enforcement, pan-European hydrogen investment & stable policy frameworks. While Dunkirk’s €1.8 billion plan may be frozen, the long-term transition away from blast furnaces continues, driven by investor pressure, regulatory mandates & the undeniable physics of climate change. As de la Salle put it succinctly, “This is not an exit from decarbonization. It is a recalibration forced by today’s economics.”

 ArcelorMittal SA (AMS: MT)

- Current Price: 29.13 EUR 

- Daily Change: +0.080 EUR (+0.28%, calculated) 

1. Support & Resistance 

   - Immediate Resistance: €29.20–29.50 (200-day SMA + 2024 swing highs). 

   - Strong Support: €28.40–28.60 (50-day SMA + recent consolidation floor). 

   - Breakout Watch: 

     - Close above €29.50 → Targets €30.00 (psychological) → €31.00 (61.8% Fib). 

     - Failure → Range-bound between €28.50–29.20. 

2. Moving Averages (SMA) 

   - 50-day SMA: €28.50 (price above → short-term bullish). 

   - 200-day SMA: €29.30 (price testing → decisive break needed). 

   - Golden Cross Potential: 50-SMA approaching 200-SMA → bullish if confirmed. 

3. RSI (Relative Strength Index) 

   - Current: ~60 (neutral-bullish momentum). 

   - Overbought Risk: RSI >70 if rally extends → profit-taking likely near €29.50. 

   - Oversold Safety Net: RSI <40 → accumulation opportunity. 

4. MACD 

   - Current Signal: 

     - MACD line above signal line → bullish momentum building. 

     - Histogram bars turning positive → strength confirmation. 

5. Bollinger Bands 

   - Price Position: Near upper band (€29.20) → short-term overbought. 

   - Volatility Insight: 

     - Bands narrowing → low volatility → imminent breakout likely post-earnings. 

6. Fibonacci Retracement 

   - Range (March 2024 high: €31.50, June low: €25.80): 

     - 61.8% retracement: €29.50 → key resistance. 

     - Break above targets €30.50 (78.6%) → €31.50 (100%). 

Key Takeaways

•      ArcelorMittal suspended its €1.8 billion Dunkirk DRI & hydrogen plant, citing hydrogen cost.

•      €850 million ADEME funding remains unused, linked to hydrogen-based operation.

•      The firm still plans a €1.2 billion electric arc furnace for late 2028 or early 2029.