By Metal Miner - Dec 10, 2024
ThyssenKrupp Steel plans to cut up to 11,000 jobs and reduce production capacity by 23% amidst a challenging European steel market.
The company cites overcapacity, increasing cheap imports from Asia, and the need for improved efficiency as reasons for the drastic measures.
The planned closure of the Kreuztal-Eichen site and potential sale of the HKM plant are part of the company's restructuring efforts.
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ThyssenKrupp Steel (TKS) recently announced plans to cut up to 11,000 positions. In a blow to the struggling EU steel market, the German steelmaker stated it would also reduce rolled production by an average 23%.
“This is the company’s response to the further consolidation of fundamental and structural changes in the European steel market and in key customer and target markets,” the steelmaker said in a November 25 announcement. “Increasingly, overcapacity and the resulting rise in cheap imports, particularly from Asia, are placing a considerable strain on competitiveness,” the firm added.
The Move Could Affect 40% of the Firm’s Total Employees
The employment reduction plan foresees 5,000 job cuts via production and administration adjustments by 2030, with an additional 6,000 jobs transferring to either external service providers or shedding through the sale of various businesses. The projected job losses represent about 40% of ThyssenKrupp’s 27,000 employees.
The firm also pointed to structural changes within the company, stating that “In addition, urgent measures are needed to improve TKS’ own productivity and operating efficiency, and to achieve a competitive cost level.” Representatives added that “The key issues paper will be fleshed out in the coming weeks in dialog with the supervisory bodies and employee representatives.”
According to the latest reports, both parent group ThyssenKrupp AG and Czech energy company EP Group, the latter of which holds a 20% stake in TKS, support the concept.
Steel Market to Brace for Production Cuts
TKS also noted that it plans to reduce its annual production capacity from the current 11.5 million metric tons per year to a future target dispatch level of 8.7-9 million metric tons. Measures to this end include the planned closure of the Kreuztal-Eichen site, about 120 kilometers south of TKS’ main production site at Duisburg.
Kreuztal-Eichen can roll up to 1.4 million metric tons of hot rolled medium-wide strips and specialty steel as well strips and plates in bespoke sizes and surfaces per annum. Products from the site have applications in the automotive, construction and industrial machinery sectors.
TKS also plans to sell its shares of the Hüttenwerke Krupp Mannesmann plant, also located in Duisburg. The HKM plant is a three-way joint venture between TKS, compatriot steelmaker Salzgitter and French tubes producer Vallourec, with holdings of 50%, 30% and 20%, respectively. “If a sale is not possible, TKS will hold talks with the other shareholders about mutually acceptable closure scenario,” the company stated.
According to information on the company’s website, HKM can produce up to 6 million metric tons of crude steel per year via two blast furnaces and two basic oxygen converters. The site then casts the molten steel into commercial slabs and round billet. It also produces commercial pig iron for sale on the global steel market.
Just One of Several Major Market Changes Before 2025
One industry watcher was unperturbed by TKS’ announced plans, saying that it “makes 100% sense.” TKS had also warned of such an event back in October, citing poor market conditions as the reason for the planned deep cuts.
Offer prices for hot rolled coil in northern Europe in mid-November were steady month on month at €600 ($630) per metric ton EXW, though they are still down 25% from €800 ($840) at the start of 2024. Whilst market sources have noted improved interest by end users and stockists to hedge for an expected upswing in economic activity in 2025, one trader felt that “it was too little, too late” for TKS.
Further West in Europe, the owner of UK automaker Vauxhall announced plans to close its van factory in Luton and combine electric van production with its other UK plant in Ellesmere Port.
The announcement puts up to 1,000 jobs at risk. Netherlands-headquartered Stellantis, which owns auto brands Citroen, Peugeot and Fiat, cited UK rules that require electric vans to make up 10% of sales in 2024 as the reason behind the planned closure. Luton is in Bedfordshire, about 30 miles north of London, whilst Ellesmere Port is in Cheshire and about 10 miles south of Liverpool.
By Christopher Rivituso
ThyssenKrupp Steel plans to cut up to 11,000 jobs and reduce production capacity by 23% amidst a challenging European steel market.
The company cites overcapacity, increasing cheap imports from Asia, and the need for improved efficiency as reasons for the drastic measures.
The planned closure of the Kreuztal-Eichen site and potential sale of the HKM plant are part of the company's restructuring efforts.
ThyssenKrupp Steel (TKS) recently announced plans to cut up to 11,000 positions. In a blow to the struggling EU steel market, the German steelmaker stated it would also reduce rolled production by an average 23%.
“This is the company’s response to the further consolidation of fundamental and structural changes in the European steel market and in key customer and target markets,” the steelmaker said in a November 25 announcement. “Increasingly, overcapacity and the resulting rise in cheap imports, particularly from Asia, are placing a considerable strain on competitiveness,” the firm added.
The Move Could Affect 40% of the Firm’s Total Employees
The employment reduction plan foresees 5,000 job cuts via production and administration adjustments by 2030, with an additional 6,000 jobs transferring to either external service providers or shedding through the sale of various businesses. The projected job losses represent about 40% of ThyssenKrupp’s 27,000 employees.
The firm also pointed to structural changes within the company, stating that “In addition, urgent measures are needed to improve TKS’ own productivity and operating efficiency, and to achieve a competitive cost level.” Representatives added that “The key issues paper will be fleshed out in the coming weeks in dialog with the supervisory bodies and employee representatives.”
According to the latest reports, both parent group ThyssenKrupp AG and Czech energy company EP Group, the latter of which holds a 20% stake in TKS, support the concept.
Steel Market to Brace for Production Cuts
TKS also noted that it plans to reduce its annual production capacity from the current 11.5 million metric tons per year to a future target dispatch level of 8.7-9 million metric tons. Measures to this end include the planned closure of the Kreuztal-Eichen site, about 120 kilometers south of TKS’ main production site at Duisburg.
Kreuztal-Eichen can roll up to 1.4 million metric tons of hot rolled medium-wide strips and specialty steel as well strips and plates in bespoke sizes and surfaces per annum. Products from the site have applications in the automotive, construction and industrial machinery sectors.
TKS also plans to sell its shares of the Hüttenwerke Krupp Mannesmann plant, also located in Duisburg. The HKM plant is a three-way joint venture between TKS, compatriot steelmaker Salzgitter and French tubes producer Vallourec, with holdings of 50%, 30% and 20%, respectively. “If a sale is not possible, TKS will hold talks with the other shareholders about mutually acceptable closure scenario,” the company stated.
According to information on the company’s website, HKM can produce up to 6 million metric tons of crude steel per year via two blast furnaces and two basic oxygen converters. The site then casts the molten steel into commercial slabs and round billet. It also produces commercial pig iron for sale on the global steel market.
Just One of Several Major Market Changes Before 2025
One industry watcher was unperturbed by TKS’ announced plans, saying that it “makes 100% sense.” TKS had also warned of such an event back in October, citing poor market conditions as the reason for the planned deep cuts.
Offer prices for hot rolled coil in northern Europe in mid-November were steady month on month at €600 ($630) per metric ton EXW, though they are still down 25% from €800 ($840) at the start of 2024. Whilst market sources have noted improved interest by end users and stockists to hedge for an expected upswing in economic activity in 2025, one trader felt that “it was too little, too late” for TKS.
Further West in Europe, the owner of UK automaker Vauxhall announced plans to close its van factory in Luton and combine electric van production with its other UK plant in Ellesmere Port.
The announcement puts up to 1,000 jobs at risk. Netherlands-headquartered Stellantis, which owns auto brands Citroen, Peugeot and Fiat, cited UK rules that require electric vans to make up 10% of sales in 2024 as the reason behind the planned closure. Luton is in Bedfordshire, about 30 miles north of London, whilst Ellesmere Port is in Cheshire and about 10 miles south of Liverpool.
By Christopher Rivituso
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