European Steel Sector Eyes 2026 Recovery As Import Curbs, Pricing Gains Take Hold
WinkelmannThe European steel industry is positioned for a significant 2026 rebound after bottoming in 2025, with benchmark hot rolled coil (HRC) prices forecast to reach $750/t, up more than $100/t from third quarter lows of $650/t, according to analysts at Jefferies in a note dated Tuesday.
The European steel industry is positioned for a significant 2026 rebound after bottoming in 2025, with benchmark hot rolled coil (HRC) prices forecast to reach $750/t, up more than $100/t from third quarter lows of $650/t, according to analysts at Jefferies in a note dated Tuesday.
The brokerage projects diversified steel giant ArcelorMittal will achieve €8.3 billion EBITDA in 2026 versus €8.2 billion consensus, Swedish specialty steelmaker SSAB SEK13.2 billion versus SEK13.1 billion consensus, and Austrian steel and technology group Voestalpine €1.7 billion versus €1.72 billion consensus.
This follows 2025 trough levels of €6.6 billion, SEK10.2 billion, and €1.5 billion respectively for the three producers.
The recovery hinges on the European Commission's October 7 proposal to slash steel import quotas by 50% to 18.3mT and double tariffs on non-quota volumes to 50% from 25%, effective July 2026.
This should reduce import penetration from 25% back toward 15% and boost domestic production by 10mT, driving industry operating rates up more than 10% from current 65-67% toward targeted 80-85% levels.
ArcelorMittal cited potential reductions of 8mT in flat steel imports and 2mT in long steel imports.
The Carbon Border Adjustment Mechanism (CBAM) beginning January 2026 will add €40–70/t to import prices, while Germany's €500 billion infrastructure program should boost demand 1-2% annually from 2027.
Every €50/t price increase would boost 2026 EBITDA by 20% for ArcelorMittal, 13% for SSAB, 15% for Voestalpine, 57% for German producer Salzgitter, and 24% for industrial conglomerate ThyssenKrupp.
A 5% volume increase would add 5-18% to EBITDA, with Salzgitter seeing the greatest upside at 18%.
Current pricing shows US HRC at $981.1/t, EU HRC at $712.7/t, and China export HRC at $457.0/t as of December 1.
Raw materials stand at iron ore $90.6/t and premium hard coking coal $172.6/t. ArcelorMittal has already raised December delivery prices to €630/t from July's €560/t trough.
However, European steel stocks already rallied substantially in 2025, with ArcelorMittal up 41.3% year-to-date, SSAB up 50.7%, Salzgitter up 65.2%, and Voestalpine up 58.5%, compared to the Stoxx600's 14% gain.
Valuation multiples re-rated by more than 1 turn to approximately 5x EV/EBITDA from 3.5x, now exceeding the 10-year average of 4.5x.
Jefferies cautioned that with 2026 forecasts broadly in-line with consensus, the market already assumes recovery reflecting more than $100/t price increases and 3-5% volume growth.
EU steel stocks are broadly pricing recovered 2026 and mid-cycle EBITDA on 10-year average multiples, the brokerage said.
For shares to work from current levels, actual volume and price-driven EBITDA upgrades need to materialize. The brokerage prefers SSAB in carbon steel and Spanish stainless producer Acerinox for 2026.
