JPM Steel | Daily Despatch: Asian spreads -1%; Nippon expects US steel market to remain buoyant; AISI President sees USMCA review dragging into 2027

Research evidence excerpt

JPM Steel | Daily Despatch: Asian spreads -1%; Nippon expects US steel market to remain buoyant; AISI President sees USMCA review dragging into 2027

of $3.51-3.55 missed pre-print consensus $4.16 by 15% including a $16M asset write-down

from relocating the planned AZ satellite recycled slab caster. Even adjusting for this (est. <$0.10/shr impact), the guide likely

would have missed, which we suspect may be related to continued, albeit less pronounced, ADI losses and/or greater mill

intersegment eliminations. Steel Operations profitability should improve “meaningfully” on ASP growth outpacing scrap.

Steel Fab earnings were guided “incrementally” lower as lagged input costs more than offset stronger shipments/steady

pricing, in-line with our expectations but differing from peer NUE guiding to improved pricing likely from stronger product

diversification. Metals Recycling earnings were guided steady. Source: J.P. Morgan (note)

• Apple to raise prices due to memory chip crunch: Apple is preparing to raise prices to offset rising memory costs. CEO

Tim Cook said the company has worked to absorb much of the impact, but some price increases are ultimately unavoidable.

Cook said rising memory and storage costs remain a challenge, highlighting DRAM in particular as more supply is being

allocated to HBM for AI servers, the report notes. Notably, Cook said Apple is prepared to leverage its cash reserves to help

secure additional memory supply. WSJ notes that it remains unclear whether Apple can match the aggressive terms AI

hyperscalers are offering to lock up supply. Source: TrendForce, WSJ

• Cost pressures outweigh steelmakers’ decarbonisation drive: Singapore forum: As steel mills contend with high