'The fog of trade wars'- JPM sees negatives for end-demand in European steel

SSAB AB

13/03/2025 12:35

** J.P. Morgan says escalating trade frictions are likely to prove negative for end-demand in the European steel, as 25% tariffs on U.S. imports of steel and aluminium became effective on Wednesday

** The broker sees "tangible tailwinds" for European steel equities, but says that "the test is how to mitigate and monetise these when perceptions do not meet reality, plus external threats continue unabated"

** JPM sees that Germany's EUR 500 billion infrastructure stimulus and Ukraine reconstruction could boost European steel demand by >10Mtpa, or +8-12%

** Moreover, it expects European defence spending to boost EU steel demand, after the EU and Germany announced EUR 1.3 billion in new spending

** JPM adds the possibility for other EU nations to propose domestic infrastructure and higher defence spending packages has potential to boost EU steel demand further in the future

** It upgrades SSAB SSABa.ST to "overweight" from "neutral", citing the company's highest exposure to Europe and U.S. infrastructure and defence sectors

** It raises Voestalpine VOES.VI and Aperam APAM.AS to "neutral" from "underweight", seeing the risk-reward more balanced and valuation less demanding

COMPANY
NEW RATING
OLD RATING
NEW PT
OLD PT
SSAB
overweight
neutral
SEK 77
SEK 58
Aperam
neutral
underweight
EUR 33.10
EUR 27.80
ArcelorMittal MT.LU
n/a
neutral
EUR 30.5
EUR 23.5
voestalpine
neutral
underweight
EUR 25
EUR 16.30
Salzgitter SZGG.DE
underweight
n/a
EUR 18
EUR 14.1
ThyssenKrupp TKAG.DE
neutral
n/a
EUR 6.5
EUR 4.1
Acerinox ACX.MC
neutral
n/a
EUR 12.1
EUR 12.2
Aperam
neutral
underweight
EUR 33.10
EUR 27.80
Outokumpu OUT1V.HE
neutral
n/a
EUR 4
EUR 2.9

 (Reporting by Marta Frackowiak)

 ((marta.frackowiak@thomsonreuters.com))