Bankinter | The European Commission (EC) announces a proposal to revise steel import quotas in Europe. It reduces current quotas by 50% and raises the tariff to 50% (from 25%) above a certain quota (18.3Mtn). The aim is to protect the European steel industry in a context of global overcapacity. The EU seeks to prevent cheap steel from countries such as China and India from being diverted to Europe following the 50% tariff imposed by the United States.
Bankinter analysis team’s view: This is good news for European producers who, since the introduction of tariff measures in the United States (Section 232. Currently, tariffs on steel and aluminium are 50%). The proposed tariff change in Europe should moderate the market share of imports, which should allow for an improvement in demand for local producers in the medium term, even in an environment of stable final demand.
The measures are expected to come into effect on 1 January 2026. European companies have several catalysts in the medium term: (1) the proposed tariff measures should contribute to improved expectations for a medium-term recovery in market share from imports (the market share of steel imports would remain at around 25% and stainless steel in Europe accounted for 23% in Q2 2025) and a reduction in the risk premium; (2) Expectations of improved investment decisions in Europe, in an environment of low interest rates (ECB 2.0% and 2.15%). These include measures to accelerate defence investment and infrastructure plans in some countries, such as Germany.
ArcelorMittal generated 48% of its sales and 26% of its EBITDA in Europe in 2024; demonstrating its ability to generate operating cash flow, even during downturns, which has allowed it to maintain its shareholder remuneration policy (via dividends and share buybacks) and has limited leverage (1.2x DFN/EBITDA 2Q 2025). Therefore, we are revising our recommendation to Buy (from Hold) and preliminarily raising (with no change in our 2026 estimates, we are applying a historical multiple of 4.6x P/CF) our Target Price to €34.6/share (from €27/share).
Acerinox generated sales in Europe (36% of its 2024 revenue), although its results in Europe continue to be under pressure from import prices. Most of its results to date come from the United States, so in the short term it should benefit from the stabilisation of the dollar after its weakness in 1H2025 (-13.5%). Despite this, Acerinox has also been able to generate operating cash flow during the low points of the cycle and maintain its dividend policy (D/E ~5%) and investments. We maintain our Buy recommendation and preliminarily raise (with no change in our 2026 estimates, we apply a historical average multiple of 6.3x P/CF) our Target Price: €12.6/share (from €11.0/share previously).
