Plate Momentum Continues to Build; Reiterate Overweight

Research evidence excerpt

Plate Momentum Continues to Build; Reiterate Overweight

IdeaM

Special Steels - Margin Resilience

A quality earnings anchor

The Special Steels business provides SSAB with a high-quality earnings base. The division

accounted for 52% of group EBITDA in 1H26, with a 24% EBITDA margin despite a weak

European industrial backdrop. It provides a more differentiated product mix, stronger

customer value proposition and lower commoditisation risk than standard steel,

supporting a quality normalised earnings base through the cycle. The improvement in

EBITDA/t reflects a multi-year mix shift towards premium grades, expansion into

downstream services, and a broader premium product strategy that was led by the

current group CEO.

Exhibit 7: Special Steels EBITDA/t has structurally reset higher

Special Steel EBITDA/t 700 US$/t

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026e 2027e 2028e

Source: Morgan Stanley Research estimates (e), Company Data

The business is structurally different from commodity steel. It is a leading Q&T and

advanced high-strength steel producer, with a market share >30% in wear steels and a

product portfolio built around brands such as Hardox, Strenx, Armox and Toolox. These

products are sold on performance – wear resistance, strength, weight reduction,

protection and application efficiency – rather than benchmark steel pricing. While this

would not remove business cyclicality, it supports more resilient pricing and margins than

standard products.

Furthermore, volumes/shipments have outgrown the broader European steel market;

Special Steels shipments have compounded at ~1.3% p.a. over 2013-25, vs slightly negative

EU27+UK apparent demand, underscoring the superior growth trends in the underlying