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Investing.com -- Deutsche Bank has updated its outlook on the European steel sector, arguing that a shift in trade policy could reshape conditions for producers after years of pressure from weak demand and rising imports.
Analysts Bastian Synagowitz and Liam Fitzpatrick say the group has faced “weak demand, import pressure and policy headwinds,” and while fiscal spending and lower rates may lend support, the pair remains cautious on near-term demand trends.
Analysts flag the European Commission’s plan for a substantial increase in trade protection as the key development for 2026. The arm’s “plans for material step-up in trade protection” mark a broader turn toward “a more steel-friendly industrial policy,” the analysts noted.
Even partial implementation, they argue, could help mills return to a “structurally higher return and lower risk environment.”
“This makes the sector arguably more attractive and puts it where cement and defence were a few years ago, with the potential for valuations to revert back to mid-cycle levels vs. the multiple deflation seen over the last eight years. Hence, we remain positive on the sector,” they added.
The bank’s top picks against this backdrop are Voestalpine, ArcelorMittal, Aperam and Acerinox, all rated Buy.
Acerinox’s price target was lifted from €14 to €16, while Aperam’s increased from €37 to €42.
ArcelorMittal’s Amsterdam-listed shares saw their target raised to €42 from €38, and the New York-listed stock was upped to $49 from $44.
Voestalpine’s target was also revised higher, moving from €41 to €44.
Meanwhile, Outokumpu was held at Hold, but its target rose from €3.6 to €4.1. SSAB remained Hold with a revised SEK60 target from SEK55.
Salzgitter was upgraded from Hold to Buy, and its target was lifted sharply from €27 to €40.