Positive impact of FIFO on steel distributor margins
At the same time, this aligns with the expected tightening of EU market protection, i.e. CBAM and new contingencies, which from 1 July 2026 will limit imports and support the competitiveness of European smelters.
In April, German and Italian smelters signaled another round of price hikes of 50‑70 EUR/t, and producers were also ready to limit volumes to rebuild margins. Meanwhile, in March ’26 the downward trend in steel production in the EU persisted, with a decline of 4.6% YoY.
We view the rise in steel prices positively for the steel distributor (STF), as it will support top‑line and margins through the FIFO effect. We assume a 17.9% YoY increase in the price of steel products sold by STF in 2026 and a margin increase in the steel segment of 1.8pp YoY. Additionally, the current price trend is supported by higher production costs and import‑limiting regulations – assuming full implementation, we expect further price increases in 2H’26, and any acceleration in demand could further strengthen the momentum.
We also assume a 7.2% YoY increase in STF volume in 2026, supported by both improved demand (ArcelorMittal indicates about +2% YoY) and market share growth thanks to earlier strengthening of staffing resources during the downturn.
In the infrastructure segment we assume a transitional slowdown after a very strong 2025, which ended the largest LNG contract in history. Currently, the slowdown in GazSystem and PSG tenders is visible, reducing Izostalu’s order book to about 230 m PLN from 750 m PLN YoY, limiting the visibility of results in 2026. We assume a 34% YoY decline in infrastructure segment revenue. At the same time, we believe the slowdown is temporary and expect a rebound in tender activity in subsequent periods, further supported by the growing share of “local content”, which may further improve margins.
Taking the above into account, we update our recommendation from Hold to Buy and raise the 12‑month target price to PLN 10.48 per share (growth potential +26.0%).
Stalprofil, key financial data, PLN mln
