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Investing.com -- Jefferies expects continued weakness in European steel prices through the second half of 2025 (2H25), particularly during the seasonally soft third quarter.
The broker lowered its EU hot rolled coil (HRC) forecast by more than 10% quarter-on-quarter, projecting prices to fall to €550–600 per tonne, compared to €640/t in the second quarter and a current spot price around €560/t.
“We are more cautious on EU steel exposure through seasonally softer 3Q, and we expect weak demand, lower prices & muted 3Q profit outlooks,” analyst Cole Hathorn said in a note.
Looking into 2026, the implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) and prospects for restocking are expected to lift prices again, with forecasts pointing to €657/t.
The firm revised its earnings forecasts downward for both SSAB AB (ST:SSABa) and ArcelorMittal (NYSE:MT). SSAB’s 2025 EBITDA was cut by 11% to SEK10.8 billion, mainly due to weaker volumes, pricing, and foreign exchange impacts.
For the third quarter, Jefferies expects SSAB’s EBITDA to drop to SEK2.8 billion, roughly 13% below consensus.
Similarly, ArcelorMittal’s 2025 EBITDA was revised down 11% to $6.8 billion, with the broker citing continued price pressure and a $130 million tariff headwind in the second quarter, along with an incremental >$70 million impact in Q3 in the absence of new trade agreements.
The consolidation of Calvert, a U.S. steel facility acquired by ArcelorMittal in June, is expected to add $60–70 million to group EBITDA in Q3, but Jefferies noted that this will be partly offset by lower net income from India and joint ventures.
The firm said it is more constructive on the sector’s medium-term outlook, supported by the EU Steel Action (WA:ACT) Plan, increased German infrastructure spending, and the implementation of CBAM and safeguard measures.