Investing.com — stands to gain the most among European metals companies if the United States and Canada finalise a deal halving Section 232 tariffs on Canadian steel and aluminium to 25% from 50%, Morgan Stanley said in note.
The broker estimated the tariff reduction would deliver up to $300 million to $350 million in annualised pre-tax relief for the steelmaker, equivalent to roughly 3% of 2027 consensus EBITDA, by cutting costs on approximately 2 million tonnes per year of Dofasco flat steel exported from Canada to the United States.
Under the existing 50% framework, Morgan Stanley calculated the annual tariff burden at a minimum of $600 million to $700 million, assuming equal cost-sharing between the company and its customers.
ArcelorMittal management had previously indicated the Section 232 cost drag ran at approximately $150 million per quarter, though Morgan Stanley noted that figure may have reflected a lower steel price assumption.
Potentially lower U.S. steel prices following the tariff reduction could offset part of the benefit.
was rated neutral to modestly positive. The miner shipped 585,000 tonnes of aluminium to U.S. destinations in the first half of 2026, about 35% of group production of 1.676 million tonnes, incurring $773 million in gross tariff costs over the period.
Annualising that burden implies a run-rate of approximately $1.50 billion. If the tariff rate were halved across all eligible volumes, the gross annualised benefit could reach approximately $800 million, or about 3% of 2027 consensus EBITDA.
Morgan Stanley cautioned that any normalisation in regional premiums, changes in destination mix and the associated effect on Matalco’s contribution could erode part of that gross benefit.
Swedish steelmaker was flagged as a modest negative, given its approximately 2 million tonnes per year of U.S. plate exposure.
Morgan Stanley estimated every $10 per tonne move in plate prices shifts SSAB’s EBITDA by approximately 200 million Swedish crowns, or roughly 1% of 2027 consensus EBITDA.
A lower tariff rate would improve the economics of Canadian supply, particularly from Algoma, and could ease current U.S. plate tightness, though Algoma’s temporary electric arc furnace outage may limit the near-term supply response.
was also rated modestly negative, with its principal exposure running through U.S. recycling and extrusion margins rather than Canadian primary metal.
The company operates approximately 1.1 million tonnes per year of U.S. recycling capacity, and a lower Midwest premium would narrow the primary metal-to-scrap price differential, partially unwinding what Morgan Stanley described as exceptional margins.
The U.S. paused planned 50% tariffs on certain Canadian goods for three days while both sides finalised an agreement, according to Bloomberg, cited in the note.