European stainless steelmakers are pushing back against expectations of fast demand recovery, as the European Union’s tighter import curbs have yet to translate into stronger orders.
The European Union imposed tighter steel import rules in July, complementing the fees on high-emission goods that have been in force since January, to protect domestic manufacturers from cheaper, often carbon-intensive shipments from other parts of the world, notably Asia.
But trade protection alone cannot generate demand. Sud Sivaji, the CEO of Luxembourg-based Aperam (AMS: APAM), said on Friday he was not counting on the long-touted demand recovery to happen in 2026, as customers remain in a wait-and-see mode.
“For the past three and a half years, people have been hoping and praying and talking about demand recovery,” Sivaji told Reuters in an interview. “But we’ve always said that real, underlying, demand is not picking up.”
His comments echo similar warnings from Finnish peer Outokumpu (HEL: OUT1V) and Spain’s Acerinox (BME: ACX), which both said the recovery in the European stainless steel market had been delayed.
For stainless steel producers, lower imports cannot compensate for a lack of orders from end-users, particularly in the household appliance and automotive industries.
For customers to return, either inventories must fall or business activity and investment must improve, Outokumpu Chief Financial Officer Marc-Simon Schaar said.
He expects the market to normalise in the first half of 2027, as clients work through excess inventories built up ahead of the EU safeguards.
Sivaji said a recovery could be triggered by easing turbulence in AI-related markets or a resolution of the Iran war that would bring energy prices closer to normal levels.
Earnings forecasts disappoint
Outokumpu’s deliveries fell 7% quarter-on-quarter to 454,000 metric tons between July and September, and it expects them to decline by a further 5% to 15% in the final quarter of the year.
It also warned fourth-quarter adjusted earnings before interest, taxes, depreciation and amortisation would fall to only a tenth of its third-quarter result of €101 million ($113 million).
Aperam, meanwhile, forecast quarterly adjusted EBITDA of around €110 million, a slight sequential increase but about 25% below an LSEG consensus estimate.
Acerinox last week also guided for sequentially lower fourth-quarter earnings, citing an expected business slowdown during the US holiday season and a protracted recovery in Europe.
Shares of Outokumpu and Aperam fell 13% and 2.5% by 1345 GMT, respectively, while Acerinox closed 5.5% lower last Friday when it reported its results.
Carbon steelmakers, on the other hand, have benefited from an improving European environment, with ArcelorMittal MT.AS expecting shipment growth in the fourth quarter and SSAB (STO: SSAB-B) citing price increases thanks to the EU measures.
“Unlike in carbon steel, weak market conditions are preventing stainless steel producers from passing through price increases to offset higher energy costs,” Oddo BHF analyst Maxime Kogge said in a note to investors.
($1 = 0.8930 euros)
(Reporting by Javi West Larrañaga and Jagoda Darlak in Gdansk, editing by Milla Nissi-Prussak)
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