Tommaso Castello

Tommaso Castello joined the team in 2023. Before joining Jefferies, he had worked as a mechanical engineer in the steel industry and pursued an MBA from Judge Business School. Cole Hathorn joined Jefferies in 2014, following several years of financial services experience across various roles in investment management, advisory, risk and audit. He is a chartered accountant CA(SA), and CFA charter holder. Cole now leads the European Steel coverage along with the European Forestry, Paper & Packaging coverage.

What We Are Known For

• Value over volume amid rapidly evolving environment: European steelmakers are navigating a period of change and uncertainty, with flat regional demand, ongoing challenges in Chinese construction, and mounting pressure to cut CO₂ emissions. As the cost curve steepens due to higher CO₂ allowance costs, producers are increasingly prioritizing value over volume. Those with credible decarbonization strategies and lower costs are set to emerge as relative winners. In 2026, policy-driven tailwinds—such as CBAM and the Steel & Metal Action Plan—could be key catalysts for earnings and stock performance.
• Expert calls, seminars and conferences: We host and participate in events, congresses and conferences with industry experts regarding topics such as CBAM implementation, trade tariffs, import/export quotas, and decarbonisation projects, to help provide investors with useful insights from a different perspective and differentiate our stock recommendations.
• Policy tailwinds supporting EU steelmakers through decarbonization and investment: The steel industry is responsible for 5–6% of Europe’s CO₂ emissions, and tightening environmental regulations are accelerating the need for decarbonization or the purchase of CO₂ allowances. Free EU ETS allocations will decline from 2026 and phase out entirely by 2034, with CBAM (Carbon Border Adjustment Mechanism) introduced to level the playing field by taxing imports from countries with lower carbon costs.
• The European Commission’s Steel & Metal Action Plan marks a decisive shift to protectionism, with tariff-free import quotas cut by nearly half to 18.3mT and out-of-quota tariffs doubled to 50%. Enhanced traceability measures (melt & pour) further prevent circumvention. These actions, alongside German infrastructure spending, are set to boost EU steel production by 10–15mT, raise operating rates from 65–67% back towards 80–85%, and support prices and mid-term earnings. From 2027 onwards, Germany’s €500bn infrastructure program could add 1–2% p.a. to EU steel demand, reinforcing a more positive outlook for the sector versus history.