Summer de-stocking Restrains Prices; Policy Driven Rebound Ahead

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Summer de-stocking Restrains Prices; Policy Driven Rebound Ahead

es (7-8 weeks) and limited imports. The market is reported as "strong" and distributors

don't expect any particular summer slowdown this year. Against this backdrop, we view Exhibit 4 - EU Steel: Share Perfirmance Since

Nucor as best positioned to capture the upside given its consistent execution and balanced Iran War Breakout 28/02/2026

exposure, reinforcing our preference for the name at ~8.8x ’27 EV/EBITDA. Near-term, some 30%

20% 19% 17%

relative performance risk remains from rotation into globally leveraged commodities, but the 10%

2% 3%

0%fundamental outlook for US steel remains supportive.

-10% -5% -3% -4%

-10%

Stainless - Imports decline benefit utilisation rates; Weak demand persists: EU stainless -20%

imports have fallen materially since 1Q (-40% YoY) and now account for ~15% of market share

(vs ~25% previously), reflecting a shift toward domestic sourcing amid CBAM uncertainty .

& trade measures. However, underlying demand remains very low, limiting pricing despite Source: Factset, Jefferies

tighter import supply. Raw materials have moved higher alongside steel prices (+16–20%

YTD), squeezing margins and near term, we expect only modest QoQ improvement driven by

seasonality & better capacity utilisation, rather than a demand recovery. Supply rebalancing

supports volumes for EU mills: The reduction in imports (~10% of market share) implies 400–

500kt of volumes to be reabsorbed by domestic producers. This translates into incremental Cole Hathorn, CFA * | Equity Analyst

volumes of roughly ~50kt for ACX, ~150kt for OUT1V, and 75–100kt for APAM. 44 (0) 20 7029 8520 | chathorn@jefferies.com

Tommaso Castello * | Equity Analyst