Analysts express a more cautious stance on the near-term outlook for the metals and mining sector, attributing it to cyclical factors and noting the potential downside risk to consensus estimates. Despite recent significant weaknesses, it's deemed too late for modifying ratings, but there remains a preference for prominent miners and steel producers. A more robust demand environment is anticipated around 2026 and 2027, which is expected to result in considerably higher prices for certain key commodities as well as for the shares of most companies in the sector.

The firm anticipates a sequential decline in core EBITDA for Q1, driven by margin compression in North America, though partially offset by carbon credits received in Europe. It is also suggested that Q2 earnings may represent a near-term trough, with improvements expected in the second half of the year.

Steelmakers are grappling with the aftermath of a 30% price reduction over the prior year as they move into 2025. There is an anticipated 20% downside risk heading into the fourth and first quarters, with distributors adopting a 'wait-and-see' approach. The decline in European demand is now perceived as being more structural rather than cyclical.