JPM cuts ArcelorMittal and Salzgitter as EMEA metal stocks face near-term risks

Outokumpu Oyj

11/10/2024 09:31

** J.P.Morgan recommends reducing EMEA metals exposure in
the near-term to mitigate trade and tariff-related risks ahead
of the U.S. presidential election on Nov. 5
    ** It says increased protectionism if Donald Trump wins the
election could benefit firms with U.S. production such as SSAB
 SSABa.ST  and Acerinox  ACX.MC , but pose a risk to exporters
like ArcelorMittal  MT.AS  and Outokumpu  OUT1V.HE 
    ** It adds China's annual steel exports of around 100 Mt
will continue to depress EU steel prices, with lower
profitability for European steelmakers set to persist into 2025
    ** JPM cuts ArcelorMittal to "neutral" from "overweight",
expecting limited mid-term organic FCF generation due to lower
steel prices
    ** It cuts Salzgitter  SZGG.DE  to "underweight" from
"neutral", saying the acute weakness in German steel demand will
remain a headwind in 2024/25
    ** JPM puts Acerinox on a negative catalyst watch into Q3
results, seeing further earnings downgrades

 (Reporting by Amir Orusov and Anastasiia Kozlova)
 ((Amir.Orusov@thomsonreuters.com;
Anastasiia.Kozlova@thomsonreuters.com))