The European steel industry is poised for a significant rebound in 2026 after bottoming out in 2025, according to analysts at the investment bank and financial services company Jefferies Group.

The recovery hinges on the European Commission's proposal published on October 7 to reduce steel import quotas by about 50% and double tariffs on out-of-quota volumes to 50% from 25%, effective from July 2026.

This should reduce import penetration from 25% back to around 15% and boost European production by 10 million tons, raising industry operating rates by more than 10%, from the current 65-67% to target levels of 80-85%.