Germany's Thyssenkrupp shuts plate mill, keeps M&A options open until 2021
Posted on 20 November 2020
Germany's Thyssenkrupp is looking to close its plate mill as it failed to find a buyer while still pursuing discussions with several other steel producers to find a buyer or partner for the struggling entire steel unit until deciding in March next year, the company said Nov. 19.
The company is also evaluating whether a "stand-alone" future strategy without a partner for the steel unit can work. The company also highlighted the transformation to green steel will need government funding and it would be in discussion with the state and federal governments.
Thyssenkrupp received a non-binding offer from Liberty Steel for its steel unit in October.
Additional job cuts, restructuring of steel
During the annual results press call Nov. 19, the company said it was not possible to find a buyer for its plate mill in Duisburg-Huettenheim until the deadline of Dec. 31, 2020 and is seeing a "high likelihood" to close the mill 2021, while the stainless steel plant AST in Italy has gathered undisclosed interest. Thyssenkrupp is further continuing with the profitability analysis of the Bochum plant.
There will be 7,400 further layoffs, of which 5,300 will be in Germany. The cuts will be across different parts of the company but in materials business especially. The job cuts add to the already 3,600 jobs axed, the company said on the call.
The current capacity utilization rate at the Thyssenkrupp steelworks have further increased from the previous rate of "just over 60%", CFO Klaus Keysberg told S&P Global Platts during the call, adding he cannot comment on how much but highlighted the production is not back on full rate. Platts understands a full rate is usually 90-100% utilization.
Overall, the effects of the coronavirus pandemic were increasingly felt in the steel unit in the course of the third quarter at Thyssenkrupp. Full-year order intake and sales were down by 17% and 20%, respectively. Due to the "collapse" in shipments and the cost pressure from weak capacity utilization, adjusted EBIT showed a loss of Eur946 million compared with a profit of Eur31 million a year earlier.
Steel production, shipments up in Q4
Production of crude steel increased in Q4 to 1.8 million mt from 1.6 million mt in Q3, but the full-year fell 12.8% to 7.6 million mt. Crude steel production at semis producer HKM fell further in Q4 to 417,000 mt from 485,000 mt in Q3. The full year production stood at 2.3 million mt, down from last year's 2.6 million mt.
Hot-rolled shipments increased in Q4 to 765,000 mt from 637,000 mt in Q3 on increased demand from the automotive industry. The full-year shipments of HR amounted to 3.1 million mt, down 18.1% on the year.
Cold-rolled shipments grew from 1.2 million mt in Q3 to 1.6 million mt Q4, seeing an overall 9.3% y-o-y drop to 6 million mt.Source : Platts