BNP Paribas has adjusted its analyst recommendations across several steelmakers in Europe and the United States, elevating ArcelorMittal to its leading European selection while revising ratings for a number of other names in the sector.
In the bank's latest coverage update, Commercial Metals was upgraded from Neutral to Outperform. By contrast, Acerinox and Aperam were both downgraded from Neutral to Underperform.
BNP Paribas analyst Tristan Gresser flagged a surprise interruption to the EU hot-rolled coil (HRC) price rally, saying the pause "caught him by surprise, exposing unforeseen CBAM loopholes and putting Q2/Q3 earnings at risk." He nonetheless argued that the current inventory overhang is unlikely to be permanent. "Inventories will not last forever and with import quotas now taking over, we expect mills to fully regain control of the market and push for higher prices with ArcelorMittal best positioned," Gresser added.
The bank highlights diverging momentum between the European and U.S. steel markets as they head into the second half of the year. In Europe, an unanticipated resurgence of imports during the second quarter generated an inventory glut that interrupted the HRC price advance. BNP Paribas views that disruption as temporary in light of restrictive import quotas now in place and anticipated price increases over the summer.
By contrast, the U.S. market has seen a prolonged price advance. Gresser said disciplined U.S. steelmakers "have extracted as much as possible from an exceptional ten-month price rally," but he also noted that the second half is likely to be less tight than the first and that the market may be approaching a peak.
In terms of forecasts, BNP Paribas trimmed its full-year 2026 EU carbon steel price projections by 20 per tonne, reducing its EBITDA estimates by 10% and aligning them with consensus. In the U.S., the bank raised second-half forecasts by roughly $100 per short ton.
Despite the recent volatility, the bank still expects prices to reset higher over time. BNP Paribas now sees EU HRC climbing to 75 per tonne and U.S. HRC reaching $1,000 per short ton - levels Gresser says the market still underestimates.
On stock-specific positioning, BNP Paribas said it stands furthest above consensus on Salzgitter, ArcelorMittal, Steel Dynamics and SSAB. Having rolled forward its valuation approach to fiscal year 2027, the bank estimates roughly 30% upside remaining for its top European picks - ArcelorMittal, Salzgitter and SSAB - while Nucor has overtaken Steel Dynamics as the bank's preferred U.S. exposure.
Gresser also commented on the stainless-steel sub-sector, observing that it "has run too far," with "margin expansion... minimal and the near-term outlook remains uncertain."
BNP Paribas made several target-price adjustments, with Salzgitter registering the largest increase. Its target was raised 23% to 7, implying approximately 55% upside. ArcelorMittal's target rose 21% to 0.
The update reflects a mix of tactical rating changes and broader forecast shifts as BNP Paribas incorporates recent import dynamics, CBAM effects and quota enforcement into its sector view. The bank's repositioning indicates greater conviction in a subset of European producers while signaling caution around stainless producers and shifting preferences among U.S. names.
Stocks mentioned: ACX, SSABa, SZGG, STLD, MT, NUE, APAM, CMC.