Citi says weak Q3 for European steel already priced in by consensus
** Citi sees earnings weakness in the seasonally soft Q3 for European steel, but expects that to already be taken into consideration by consensus estimates
** It points out that European steel prices have remained resilient amid falling raw material prices, leading to small recovery in spot steel margins
** The brokerage sees recovery in spreads as a "precursor to steel market recovery", which could potentially firm up later in 2024 following the peak of summer slowdown in Q3
** Citi sees the rate of exports continuing to slow for rest of the 2024, alleviating the pressure of excess supply and helping to restore the supply-demand balance
** ArcelorMittal MT.LU ("buy") and Salzgitter SZGG.DE("neutral") are the broker's preferred carbon steel names, and sees them as prime beneficiaries of potential European recovery
** Sees Aperam APAM.AS ("neutral") and Acerinox ACX.MC ("buy") better positioned in stainless space
** It says moderation in plate prices in U.S. and capex ramp up could be a near-term obstacle for SSAB SSABa.ST, but keeps "buy" rating on the Swedish company
** The broker also maintains "buy" on Erdemir EREGL.IS, ThyssenKrupp TKAG.DE and "neutral" on Outokumpu OUT1V.HE, voestalpine VOES.VI
Reporting by Marta Frąckowiak
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