'Game changer' - JPM sees European steel revival with new EU rules

Voestalpine AG

07/11/2025 10:08

** J.P.Morgan forecasts a European steel renaissance on the horizon as the recently proposed European Union regulations are set to be a "game changer"

** The broker cites the European Commission's planned reduction of steel imports by 40% in 2026 announced in October, subject to European Parliament approval, and the activation of EU carbon tariff on imports CBAM (Carbon Border Adjustment Mechanism) from January 1, 2026

** The new system, expected to be effective from Q2 2026, could remove 18 million tonnes of tariff-free imports, supporting higher European steel prices in the mid-term, the broker estimates

** The broker expects a restocking cycle already in Q1 and says shares have not priced this in yet as they are still below levels prior to EU Commission October announcements

** It upgrades ArcelorMittal MT.LU and Voestalpine VOES.VI to "overweight" from "neutral" and Salzgitter SZGG.DE to "neutral" from "underweight", with the former two as top picks as carbon steel is seen in higher demand than stainless

** Arcelormittal is up 2%, Voestalpine up 3%, Salzgitter up 4.4%

 (Reporting by Emanuele Berro)

 ((Emanuele.berro@thomsonreuters.com))