Jefferies analysts expect Europe’s steel industry to stage a meaningful recovery in 2026 after hitting a low point in 2025, with hot-rolled coil (HRC) prices projected to reach about $750/t—more than $100/t above the third-quarter trough of $650/t.
According to the brokerage’s latest estimates:
- ArcelorMittal (EU:MT) is forecast to deliver €8.3 billion in EBITDA in 2026, slightly ahead of the €8.2 billion consensus.
- SSAB (TG:SKWC) is projected to generate SEK13.2 billion, marginally above the SEK13.1 billion consensus.
- Voestalpine (TG:VAS) is expected to post €1.7 billion, broadly in line with the €1.72 billion market expectation.
These figures represent a recovery from estimated 2025 EBITDA lows of €6.6 billion, SEK10.2 billion, and €1.5 billion respectively.
Drivers of the expected upturn
A major catalyst for the improvement is the European Commission’s October 7 proposal to:
- Cut steel import quotas by 50% to 18.3 million tonnes
- Double tariffs on steel imported above quota levels to 50% from 25%
The measures, due to take effect in July 2026, are forecast to reduce import market share from 25% to 15%, boost regional steel output by 10 million tonnes, and lift utilisation rates from 65–67% to a healthier 80–85%.
ArcelorMittal anticipates flat steel imports could fall by 8 million tonnes and long-steel imports by roughly 2 million tonnes.
Further tailwinds include:
- The Carbon Border Adjustment Mechanism (CBAM), launching January 2026, which is expected to add €40–70/t to the cost of imported steel
- Germany’s €500 billion infrastructure programme, forecast to generate 1–2% additional annual steel demand from 2027 onwards
Earnings sensitivity
Jefferies estimates that a €50/t price increase could expand 2026 EBITDA by:
- 20% for ArcelorMittal
- 13% for SSAB
- 15% for Voestalpine
- 57% for Salzgitter (TG:SZG)
- 24% for ThyssenKrupp (BIT:1TKA)
A 5% volume increase could add between 5% and 18%, with Salzgitter at the top end of that range.
Market snapshot
As of December 1:
- US HRC: $981.1/t
- European HRC: $712.7/t
- Chinese export HRC: $457/t
Iron ore traded at $90.6/t, while premium coking coal stood at $172.6/t.
ArcelorMittal has already raised its December delivery prices to €630/t, up from July’s €560/t low.
Valuation and sector positioning
Steel shares have enjoyed a strong rally in 2025:
- ArcelorMittal: +41.3% YTD
- SSAB: +50.7% YTD
- Salzgitter: +65.2% YTD
- Voestalpine: +58.5% YTD
(vs. a 14% rise in the STOXX 600)
This re-rating has pushed sector valuation multiples from around 3.5x EV/EBITDA to roughly 5x, above the 10-year average of 4.5x. Jefferies cautions that with its 2026 estimates close to consensus, share prices already assume a mid-cycle recovery baked in by more than $100/t in price gains and 3–5% volume growth.
To see further upside at current levels, the broker argues that tangible EBITDA upgrades will be required. For 2026 positioning, Jefferies prefers SSAB among carbon steel producers and Acerinox (BIT:1ACX) in stainless steel.
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