Prepared remarks
Good afternoon, everyone. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you for joining this call today to discuss our performance and progress in the second quarter and first half of 2026. Leading today's call will be our Group CFO, Mr. Genuino Christino. Before we begin, I would like to mention a few housekeeping items. As usual, we will not be going through the results presentation, which was published this morning on our website. However, I do want to draw your attention to the disclaimers on slide 21 of that presentation. Following opening remarks from Genuino, we will be moving directly to the Q&A session. If you'd like to ask a question, please press star one one on your keypad to join the queue. With that, I'll hand over the call to Genuino.
Thanks, Daniel. Welcome everyone, and thanks for joining today's call. As usual, I will keep my remarks brief. Let me start with safety, which remains our highest priority. ArcelorMittal Safety Transformation continues to deliver measurable progress. The frequency rate of lost time injuries in the first six months of the year was a record low for our company. While we are encouraged by these improvements, we remain firmly focused on driving further progress. Turning now to the business, I would like to focus on three key points. First, we are seeing positive near-term momentum across the business. The operating environment has improved through the first half of the year, driving improved results, with positive momentum across all segments. There is more improvement to come. EBITDA for the second quarter improved to $2.1 billion. This represents a margin of $155 per ton, which is well above our previous through-the-cycle averages.
Our European segment delivered an EBITDA per ton of $98, which is a three-year high, and demonstrates the early signs of the improved policy backdrop. Importantly, these results do not yet reflect the benefits of the new TRQ trade tool, which are becoming increasingly evident. Customer engagement is higher, our order book is getting stronger, and prices are bucking the normal seasonal trends. Reflecting these positive dynamics, we have announced production restarts in Spain, Poland and more recently France. As we head into August, we have our full suite of blast furnaces in operation. As a result, we are guiding to third quarter shipments to be stable to higher than the second quarter, which would represent a powerful counterseasonal outcome. Underlying free cash flow in the first half was strong, annualizing at $2.5 billion, excluding seasonal working capital investments and the strategic growth CapEx.
This is a strong outcome at this stage of the cycle and provides the foundation for continued investments and returns of capital to shareholders. This brings me to my second point, our differentiated portfolio of strategic growth projects and the opportunities that we are developing into growth options. The medium- and long-term outlook for our business is supported by a number of powerful megatrends. Steel remains a critical enabler of electrification, renewable energy, and data center infrastructure. At the same time, growing investment in infrastructure and defense is supporting steel demand across many of our core markets. India is expected to remain one of the fastest-growing major steel markets in the world, with demand expected to approximately double over the next decade. ArcelorMittal has the products, people, capabilities, and geographical footprint to capture the opportunities these long-term trends create.
For several years now, we have been consistently funding our strategic growth projects. These high-return projects are expected to contribute new incremental EBITDA of $1.8 billion from 2026 onwards, providing a clear pathway to structurally higher earnings and returns through the cycle. What differentiates ArcelorMittal is not only the quality of our growth opportunities, but also the breadth of future options available to us. We have unique exposure to India, where we have a long-term plan to grow capacity to 40 million tons per annum. In Brazil, we are evaluating downstream growth opportunities that leverage our low-cost asset base and long slab position to create higher value products. In the U.S., we are advancing studies for a potential second EAF at Calvert, building on the successful execution of the first EAF. In Liberia, our extensive resource base and established infrastructure provide further capital-efficient growth optionality.
As with our capital allocation decisions, growth investments must compete for capital and ensure that we are on course to deliver increasing returns on capital employed. My final point is that we have all the elements in place to continue creating shareholder value. The steel industry continues to evolve. Markets are becoming increasingly regionalized, supported by trade measures that promote domestic production. This aligns strongly with ArcelorMittal's business model of local production to serve local demand. We believe this regionalization trend should support higher sustainable profitability and returns across the cycle. At the same time, supporting policy momentum, the earnings contribution from our strategic growth projects, the future growth options that we are developing, and our exposure to powerful long-term demand trends are key drivers of higher earnings, returns on capital and free cash flow over time.
Achieving our cost of capital is not a goal, but a minimum expectation for our business. We are allocating capital to projects that can generate returns well in excess of our cost of capital. The value we create for shareholders is then amplified via our consistent capital return policy, progressively growing the base dividend as earnings power of the business grows and consistent share buybacks. As I conclude, the message is simple. I would like everyone to take away three key points from today's call. First, we are seeing positive momentum across the business. Our results are improving, market conditions are strengthening, and the benefits of the recent policy change support the outlook. Second, we have a differentiated portfolio of strategic growth opportunities together with future growth options that provides a clear pathway to structurally higher earnings and returns through the cycle.
Third, we clearly have the right elements in place to create long-term shareholder value. We are focused on improving returns on capital, value-creating organic growth, maintaining a strong investment grade balance sheet, and delivering strong shareholder returns. With that, Daniel, I believe we can go to our Q&A.
Thank you, Genuino. We have a queue of questions in front of us, and the first one we will take from Alain at Morgan Stanley. Hi, Alain.
Questions and answers
Thank you for taking my question. Hi, Genuino. A couple of questions from my side. First, on Europe, can you talk a bit more about your outlook for that division? You've announced the restart of Fos-sur-Mer. Your order books appear to inflect. How should we expect your pricing dynamic to evolve into Q3 and Q4 after taking into account the lags, and should we expect any incremental ramp-up costs that can hold your margins back for Europe? That's my first question. Thanks.
Yeah. Thank you, Alain. First of all, I think what we are seeing in Europe is all very positive. If you look at our guidance for quarter three in terms of shipments being higher or flat to slightly higher than the second quarter, as you know, that's not the usual trend. That speaks to what we are seeing in terms of the order book. We are booking right now already for quarter four. It's all playing out very, very well, I would say, and that's the reason why we have brought back the furnaces, so we have three furnaces running. We will be running all of our furnaces in Europe from quarter three onwards. We are also seeing, which is also not what you would typically expect just before the summer breaks in Europe: typically, at this point of the year, you would see prices kind of drifting a little bit lower, and that's not what you see. Of course, I'm not going to comment on evolution of prices from here, but looking at the indexes right now, they are moving in the right direction.
That's very good to see. Import should be lower as a result of TRQ. I would expect the company to continue to now regain market share from imports, as we talked before. When we think about the margins of the production that we're going to be bringing back, I think the message is the same, Alain, that we talked about before. As you know, as we bring back this capacity, we benefit from fixed cost absorption; we don't really expect to be adding much in terms of fixed costs as we bring back the capacity. At the same time, you're going to have more carbon costs, so you need to balance that. Overall, our expectation is that these tons should be even more profitable than what we have today.
Thank you. That's very clear. The second question is around Section 232, which is in two parts. Firstly, the U.S. may roll out an on-shoring investment plan for aluminum, where companies become eligible to import aluminum at a reduced tariff if they are building new capacity in the U.S. Are you having similar conversations with policymakers in the U.S. to improve the economics of a potential second EAF at Calvert? That's one. Sticking with Section 232, there are talks about Mexico potentially adopting a Section 232 style tariff framework as part of a revamped USMCA. Essentially, this would push Section 232 to the Mexican border. How would this setup impact your Mexican business if it were to happen? Thank you.
Daniel, do you want to take this one?
Yes. Thanks, Genuino. Thanks, Alain, for the question. I think starting obviously with North America, Section 232, interesting development with aluminum that you noted. In the past couple of quarters, this subject has come up in our results conference calls. I think just to take a step back, it's clear that ArcelorMittal is very committed to our franchise in the U.S. and North America more broadly. We have a record of innovation. We have our global R&D resources. We have our leading customer service in terms of quality and delivery. We really have a tremendous amount to offer our customers in the U.S. The U.S. policy objective, I think, is very much around encouraging domestic melt and pour capacity. That's very much aligned with the investments that we have already been making at Calvert. Genuino talked about the EAF at Calvert in his opening remarks. The first EAF, the existing project, continues to ramp up very well.
We expect full capacity to be achieved later in this second half of the year. To remind everybody, that's a state-of-the-art facility, first of its kind, capable of producing the most demanding exposed automotive grades. Similarly, our new electrical steels project at Calvert will produce the most sophisticated non-grain-oriented steels, and that's progressing very much to plan. The second EAF is a very strong project. It would further increase our domestic U.S. melt and pour capacity. It would make Calvert less dependent on imported sources of slab. It's very consistent with that overall U.S. policy objective of producing steel domestically and having robust supply chains. Any potential savings from the policy would, I think, ultimately be determined by the Department of Commerce. Consideration would be given to the resources that are committed, the national security benefits of any commitment, and the commercially reasonable time period necessary to complete the project.
None of that we can answer at this stage. I think what I can say is that we are moving forward with the detailed engineering for the second EAF. We're incorporating the lessons learned from the first EAF project to optimize this. As and when we've got any updates, we will share those with you in due course. Then just on your second question, I think it almost answers itself. We have a strong business in North America. We're focused on producing locally for local demand. We have long advocated for a greater policy alignment between the countries of the USMCA and broadening out the Section 232 border to the whole region, really creating a steel fortress North America. Mexico continues to have relatively high import penetration compared to many of the other markets. Further improvements are needed. We can't confirm any of what you talked about in your question, but any move in that direction, we would be encouraging.
We're advocating for greater regional alignment, helping to reduce tariff-related costs across the North American business. Let's see what happens, but any progress there would clearly be positive for our North American business.
Thank you.
Great. I think we'll move to the next question, which we'll take from Ephrem at Citigroup. Hi, Ephrem.
Hi. Two questions. Firstly, can you talk about the level of inventories you're seeing in Europe? The messaging from the steel industry was that if TRQ came on, the slightly higher level of inventories carried over from last year will mean volumes will not pick up immediately. Your guidance for 3Q suggests otherwise, with much better seasonal shipments in the third quarter. Is the inventory level now significantly lower to enable that shipment increase? Secondly, related, does the extension of free allowances to 2038 by the EU tweak any of your investment or decarbonization plans in Europe? Given the blast furnaces that you are bringing back on right now, do you have enough carbon allowances for it, or is it something that you will have to buy from the market? Thank you.
Okay, thanks Ephrem. Let me take your first question, and then Daniel will comment on the ETS and the carbon cost. Inventories in Europe, Ephrem: I think what we saw during the quarter was pretty much what we were anticipating and we discussed during our first quarter. Imports were still elevated in the second quarter. However, when you look on a half-year against half-year basis compared to last year, it's relatively stable. As we also talked about in quarter one, we don't really see that inventories are so excessive in Europe. You can see that in our guidance. Perhaps that's because we are also more exposed to the south, through France and Spain. As we know, that's the region that is going to be replacing most of the imports, so a large part of the imports. When we look at our order books and how the engagement from customers is developing, it's all developing nicely, I would say. We talked also about how prices are evolving, which typically when you have high inventories you would not see that happening. That gives us confidence to provide this guidance, and we feel good about it. Daniel, do you want to talk about carbon?
Yeah, sure. On the topic of ETS, I think just to take a step back, first of all, the Commission is now finally recognizing the challenges facing industry in Europe and taking concrete actions to support it. For steel, we've seen the new carbon border adjustment mechanism (CBAM) in place since the 1st of January. The new TRQ trade tool has been in place since the beginning of this month. These are very important developments reshaping the outlook for the steel industry in Europe. The ETS review is another important component of this. The current proposals represent a step in the right direction. It reflects ongoing recognition that decarbonization objectives need to be balanced with industrial competitiveness. We see a number of positive elements, including the extension of free allocation, changes to the ETS cap that improve long-term availability of allowances, and greater support for industrial decarbonization through things like the Industrial Decarbonisation Bank.
Our key concern remains aligning rising carbon costs with the conditions needed for decarbonization at scale. We're going to continue to engage constructively on a framework that supports both decarbonization and maintains industrial competitiveness. Then on your last point, in terms of incremental carbon costs: as we increase our production in Europe, you should anticipate that this will increase our carbon costs in Europe. That's something to balance in your projections. Genuino was clear in saying that this will be more than outweighed by the operating leverage and fixed cost absorption. Those new tons that we're bringing on are incrementally more profitable than what we've just posted today.
Thank you.
Great. With that, we will move to the next question, which we will take from Reinhardt at Bank of America. Hi, Reinhardt.
Hi there, Genuino and Daniel. Thanks for taking my question. First, I just want to ask about your slab network in the Western Hemisphere. To what extent do you have spare capacity in Brazil, and especially now with the Calvert EAF ramping up, how much capacity you think you have to be able to divert into Europe if the market maybe needs some extra tons?
Hi, Reinhardt. Look, we are running our facilities in Brazil today at full capacity. The flat business is running. All the furnaces are running. Of course, we have plenty of optionality to divert volumes where we see the opportunities. The group will always have priority. As you know, we have high quality slabs coming not only from the same 3 million tons of slabs, we also have Tubarão producing slabs. We have something unique to ArcelorMittal, and we will see what happens and the ability of other mills in Europe to take market share from lower imports. ArcelorMittal remains well-positioned here, if necessary, to bring slabs. We have more downstream capacity that we can utilize if we see that opportunity. The group is in a unique position to capitalize on its footprint.
That's very clear. Thank you, Genuino. Maybe just a question on your order book comments into 3Q. Can you give us a sense of how much of that stable to up or seasonal outperformance is due to market share gains, and how much of that would you estimate is just end market activity being better than expected?
Well, clearly, the demand picture in Europe has not really changed much compared to what we discussed. Demand in Europe is stable, which is good because in prior years the real demand in Europe was declining. This year, our expectation is for real demand to stabilize, which I would say is encouraging. It's a good start. The demand picture is not changing so much. Then it's a function of the reduced level of imports that we are expecting with TRQ. That's how we are seeing the evolution here.
Understood. Thank you very much. I'll hand it over.
Great. I think we'll take the next question now from Tristan at BNP Paribas. Hi, Tristan.
Yes. Hi, thank you for taking my questions. Maybe just a quick follow-up on the order book. Were you able to quantify it in Europe? It's up year-over-year, by how much? Is it double digit?
Tristan, I think our guidance is quite clear. If you look at our deck, our slides, we have provided the drop in shipments in 2025 and 2024, Q3 against Q2. You can see that it's mid to high single digit in terms of drop in shipments quarter-over-quarter, Q3 against Q2. The guidance is for stable or slightly higher. I think that's quite specific guidance. As I talked about before, we are now really looking at Q4; we are in a good position, in a strong position here. Again, a very good level of engagement from customers. It's all developing quite well.
Okay. No, that's fair. Another question on Europe. Do you think there is a decent probability that the price-setting ton for HRC in Europe could be the tariff-paying imports? Do you think that there is going to be sufficient domestic capacity, especially in the near term? Also on the supply side, do you see a risk of seeing some idle facilities in Europe getting purchased by foreign slab producers and transformed into rerolling centers? Is that something that you would consider as a risk?
Maybe I will start and then we'll add, Tristan. First part of your question: we are still missing a meaningful pick-up in demand in Europe. As discussed, demand is now relatively flat. If you look at the World Steel Association, they have a positive forecast for next year. We have many programs announced in various countries that should support demand. We remain, in the medium to long term, optimistic that demand in Europe should start to move in the right direction as well. More recently, we have seen PMIs also move into positive territory, which is encouraging. If you get to a scenario where demand improves, why not? It might be that imports establish the price parity and influence European prices. I think we are still some time away and have to see how other mills bring capacity and what they can actually do. It's early days to talk about this. One thing is for sure: as we bring capacity back and competition does the same, the marginal cost of production in Europe should rise, and that should support prices in Europe. Daniel, do you want to talk a little bit about the rerollers?
Sure. European policy is there to promote competitiveness of domestic capacity and domestic production. The Commission does not want to see capacity close; they want capacity to remain competitive and to support employment. In the scenario you outlined, I think it would reinforce further actions from the Commission and could lead to slabs being included in the TRQ quota tool. It is probably just a question of time before slabs are considered as part of the TRQ to ensure that imports do not replace primary production in Europe. That's not a near-term risk to our view, but it's something the Commission would address if it became a threat to domestic production.
All right. That's very clear. If I could just squeeze a quick one on China. I noticed you put China restructuring as a potential upside in the presentation. I don't think that was there before. Does that mean you've seen some positive sign or expect anything in the coming year? Am I just reading too much out of it?
Unfortunately, it is something we have discussed before. We know that restructuring has to happen at some point; it's not possible for all of the industry in China to continue as it has been. At least half of the industry appears to be burning cash and it's not sustainable. When and how it happens is difficult to predict. When it does, international prices would normalize and that would support the industry globally, including Europe.
Great. Thanks, Tristan. We'll move now to take a question from Andrew at UBS. Hi, Andy.
Hey, can you hear me okay?
Yes. Thank you. How are you doing?
Excellent. Great. I just wanted to follow up on, first of all, just on the CapEx projects that aren't included in the $1.8 billion long-term guidance. I am curious on the timescale in terms of steps to implementation. It sounds like Calvert is already an approved study, as you put in the presentation. I'm curious where we go from here, construction timeline, how certain is this, and maybe just expand out some of those other projects. Then I have a follow-up on the Decarbon Europe.
Sure, Andrew. As you know, we have been investing in a good list of projects for a couple of years. We are starting to see the benefits. Already in 2025 and 2026, we have $700 million out of the $1.8 billion that we should be capturing; we captured $300 million in H1. We have another $400 million that we believe we should be capturing in H2, and there is more to come. What we are trying to do is show all opportunities across our portfolio. It's quite unique to ArcelorMittal, given our presence in five regions that are attractive from a demand point of view. You see us looking at more investments in Brazil downstream, which makes sense given our low-cost base and long slab position; the country is short value-added products. We are advancing engineering work. The same is true for Calvert and the second EAF; we are progressing there with the engineering work. In India, our ambition is significant and we are doubling capacity there.
Regarding timing, we will complete a number of projects this year: Liberia is a good example, the expansion of Serra Azul is another example, and we are completing the EAF in the U.S. We are creating space within our envelope to add some of these other projects. As we complete engineering and feel we have a good solution, we will take that to our board and announce more details, timelines, and contributions. This company will continue to grow, and that differentiates us as well.
Okay. That's clear. On the EAF projects, obviously you've advanced on Calvert. Given all the support you've received from the EU around the TRQ and the ETS changes, I'm curious how you're seeing those other potential decarbonization projects that were talked about a few years ago. What comes next? Is it Ghent? Is it Germany? DRI: you have said that that doesn't really make sense in the next few years in the past. With all this support, is DRI potentially becoming more viable? Given supply chain insecurity, do you need to build DRI capacity in Europe in the future rather than relying on the merchant HBI market when there's growing EAF supply in the European market?
Well, Andrew, to be honest, right now it's not really part of our plans. You saw what we are doing in Dunkirk. We already have DRI capacity within the group. As we know, we still have to see the conditions for DRI in Europe to develop: gas prices, hydrogen availability and price. Today it's very hard to see the right conditions. We don't see it yet. It's challenging. We have the only DRI operating in Europe in Hamburg and we know how difficult it is. In terms of sequencing, the current focus is Calvert. We have already done a lot of work on these projects. As we learn more from the Commission and the changes to the ETS, we will be in a position to move. What is important is that we will invest when it makes economic sense and when we can earn a decent return on our capital. Otherwise, as I said in my opening remarks, there is competition for capital in this group. We will fund the projects that deliver the highest returns.
Yeah. No, that sounds good. All right. Thanks very much for the response. Great. Thanks, Andy. We'll move now to take a question from Boris at Kepler Cheuvreux. Hi, Boris.
Hi. Thank you for taking my question. I would start with the usual bridge into Q3. If you could share the dynamics you see for Q3, not only for Europe, but the other regions. That's the first question.
I think it's a very simple bridge. Genuino talked about the positive outlook for the third quarter and the second half as a whole. We expect all steel segments to improve sequentially into the third quarter. The key themes for the group as a whole are higher steel shipments and higher average selling prices to be reflected in the third quarter as well. There will be some additional costs: particularly higher carbon costs as our European production increases. Those are the key themes for the third quarter. For the second half as a whole, we would expect that momentum to hopefully continue into the fourth quarter. Normally, fourth quarter is a better quarter from a volume standpoint than the third quarter. Momentum on pricing and spreads right now would come through to results with appropriate lags. The other thing to highlight is the prospect of positive free cash flow this year and beyond. We have working capital unwind and higher profitability in the second half, and that combination should be powerful from a free cash flow perspective.
Very clear. Thank you. My second question is on Europe. There are two questions in one. Where do you see the potential for margins in Europe? We are now sitting at 98, as you mentioned. It's quite a jump from 70 in Q1. What kind of potential do you see? More generally in Europe now that you have a better and more supportive backdrop than trade defense, do you see scope for consolidation? Is it now a place you would look at differently in the current setup?
Boris, in terms of the margin potential, I'm encouraged when I look at our profitability in Q2: Europe was very close to $100 already. As we talked about, we have not yet seen the full benefits of the TRQ. Clearly there is potential for us to do better, but I will not volunteer a specific number. We have not yet seen the full potential, which is encouraging. On consolidation in Europe: Europe is more fragmented than some other regions and could benefit from consolidation. ArcelorMittal is already very large and our focus is on running our assets. We have a lot of opportunities and some of the best assets in Europe. That's our focus: to run them and earn our cost of capital.
Very clear. Thanks, Boris. We'll move now to take a question from Bastian at Deutsche Bank. Hi, Bastian.
Hi. Good afternoon. Thanks for taking my question. I have one on the mining business. I guess you're holding onto the 18 million tons guidance for Liberia. There's a slide in your pack as well, but it doesn't have the numbers. Can you maybe help us with a shipment number for Liberia for the first half so that we can gauge roughly what you're still expecting in the second? That's my first question.
Sure, Bastian. The Liberia project is progressing well. We have two lines of the concentrator running. We are ramping up the second and getting ready to start the third one. We continue to guide for 18 million tons as per plan. Production in Liberia is up very significantly year on year. In the second half, we need to ship about 10 million tons to get to 18 million. We feel we can achieve that. We have the port, the rail, the infrastructure; it's all in place. As we mentioned in our MD&A and earnings release, because of a very heavy rainy season we experienced some delays in shipments, which we expect to catch up in quarter three. All in all, I would expect to see an improvement in shipments in Q3.
Got you. Thank you. Then just coming back briefly to some earlier questions, particularly regarding re-rolling capacity and implications of slabs coming in. Slabs are not yet part of these safeguards. Is there a number you have in mind how much capacity European re-rollers could ramp up here? Is there a number you would put out there as to how much of the supply gap could be filled by re-rollers until potential safeguards on slabs are introduced as well?
To be honest, it's not something we are overly concerned about. Re-rollers have been in Europe for a long time and have established supply chains. They are operating today and will continue to operate. I would not worry so much about that at this point. I am not going to comment on a specific number of how much capacity they could ramp up.
Okay, fair enough. Do you have a number in mind as to how much capacity these players really can ramp up?
No, I'm not going to comment on that, Bastian.
Yeah. I think just to complement Genuino, we really don't see a lot of spare rolling capacity in Europe that can be ramped up. The earlier hypothetical scenario of closing primary capacity and replacing it with imported slabs that are then re-rolled would be a different issue and something we would expect the Commission to address. The near-term opportunity for additional rolling in Europe is not fundamental to the near-term supply-demand outlook.
Okay, great. Very clear. Thank you.
Great. Thanks, Bastian. I think we'll move now to take our last question, which will be from Cole at Jefferies. Hi, Cole.
Good afternoon. Thanks for taking my question. I'd like to follow up on two of the new slides in the deck. The first is your sustainable solutions business. You're talking about $750 million of EBITDA medium term. I'd like a little more color: what gives you confidence in delivering that number? $750 million is more than some smaller steel companies are delivering at the moment. Some quantification would be helpful. Then, on your slide about the role of steel in transformation, how do you see steel playing its role? Thank you.
Thank you, Cole. We're very excited about the sustainable solutions division. I will address this and then Daniel will talk about the second question. We are making good progress with sustainable solutions: we are already running at a run rate in excess of $500 million of EBITDA. We are executing projects that will add to the profitability of this division. In renewables, the investments we are making in India: we are developing another gigawatt of capacity there, which is very attractive in terms of returns and IRR. It provides stable EBITDA and free cash flow, as with the first project we completed in India. The second part of the growth story is our sustainable construction business: panels and profiles that we are developing. We already have a strong base in Europe and are expanding into India, the U.S. and Brazil. We recently acquired a company in Brazil producing the same products. We are developing greenfield sites, for example a sustainable business in the U.S. These renewables and sustainable construction drivers are the key contributors to the increase in this division.
Yeah, thanks, Cole. This is a very topical theme: electrification. The role that steel will play is often underappreciated. When we think about the build-out of renewables and transmission, it simply will not be achieved without steel. We've put numbers around it on page 19 of the deck: looking at projections through 2035 for electricity generation in various regions and applying standardized assumptions around steel intensity of that generation. Once you put it together, it's a very significant number: almost 300 million tons of steel would be required to achieve these electrification goals through 2035, ex-China. It's an important theme and we have good exposure. Our product portfolio includes steels required for these applications: magnetics and other products suited to solar, heavy plate for wind, electrical steels, and transmission steels. We have the products and the footprint in key regions to capture this demand.
Thank you. One division not mentioned quarter-on-quarter was India and JVs. Could you give any color on that into the third and fourth quarter?
Thank you for asking, Cole. Performance in Q2 was strong: we had a record level of shipments, a run rate at about 8 million tonnes. Our expectation is for the division to continue to do well in Q3 and Q4. The focus is continuing to run existing operations and progressing our projects as we double capacity. Demand is strong, prices have recovered from low levels at the beginning of the year, and we expect continued strong performance in the second half.
Great. Thanks, Cole. Genuino, that was our last question. I'll hand back to you for any closing remarks.
Thank you, Daniel. Thank you, everyone. Before we close, let me briefly reflect on the key message from today's discussion. First, we are seeing positive momentum across the business, with results expected to improve across all segments. Early indicators in Europe are already encouraging, giving us confidence as we enter the second half of 2026, with momentum continuing to build into 2027. Second, we have a differentiated portfolio of strategic growth opportunities and future growth options. We are well-positioned to benefit from some of the most important changes reshaping the global steel industry. This, in turn, provides a clear pathway to structurally higher earnings and returns through the cycle. Finally, we have all the elements in place to continue growing earnings, returns on capital, and free cash flow. Structural demand drivers in a more regionalized steel industry create opportunity. ArcelorMittal's disciplined capital allocation and strategy execution, while maintaining a solid investment-grade balance sheet, provide a strong foundation for future value creation. With that, I will close today's call. If you have any follow-up questions, please reach out to Daniel and his team. Thank you again for joining us, and I look forward to speaking with you soon. Enjoy the summer and please stay safe and keep those around you safe as well. Thank you very much.