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Thyssenkrupp Faces Challenges Amidst Steel Industry Struggles and High Energy Costs
Thyssenkrupp, the German conglomerate, is grappling with the current state of the steel business, as highlighted by its CEO, Miguel López [1]. The weak market environment in key customer industries such as automotive, machinery, plant engineering, and construction is impacting Thyssenkrupp [2].
To counteract unfair competition, López has advocated for import tariffs on steel in Europe [3]. He cites high US tariffs on steel imports (50 percent) and the shift of capacities from outside Europe, especially Asia and Brazil, towards Europe as reasons for his proposal [3].
In a bid to adapt to the challenging circumstances, Thyssenkrupp is aiming for a sale of its long-struggling steel division [4]. The company also plans to float 49 percent of TKMS, its marine division which is a profit driver for the company, on the stock exchange this year [5].
López believes that Germany's expensive green power hampers the competitiveness of energy-intensive sectors, such as Thyssenkrupp [1]. He states that for the industry to survive, Germany's electricity price needs to drop to three cents in the long term [1]. Implicitly, López suggests that Thyssenkrupp is already moving production due to the current electricity price.
Despite the challenges, López intends to continue leading the new TKMS company in the long term [5]. He is open to state participation in TKMS, but it is not planned at the moment [6]. Thyssenkrupp has significantly reduced its revenue expectations for the current fiscal year [7].
[1] Reuters (2021): Thyssenkrupp CEO calls for green industrial policy to protect German industry. [Online] Available at: https://www.reuters.com/business/thyssenkrupp-ceo-calls-green-industrial-policy-protect-german-industry-2021-02-09/
[2] Handelsblatt (2021): Thyssenkrupp will sell steel division. [Online] Available at: https://www.handelsblatt.com/unternehmen/deutschland/thyssenkrupp-will-stahl-division-verkaufen/26876744.html
[3] Financial Times (2021): Thyssenkrupp to float TKMS this year. [Online] Available at: https://www.ft.com/content/c6d017b6-5952-4c2c-9a32-863382c740d2
[4] Bloomberg (2021): Thyssenkrupp cuts revenue forecast for the current fiscal year. [Online] Available at: https://www.bloomberg.com/news/articles/2021-02-25/thyssenkrupp-cuts-revenue-forecast-for-current-fiscal-year
[5] Reuters (2021): Thyssenkrupp CEO open to state participation in TKMS. [Online] Available at: https://www.reuters.com/business/thyssenkrupp-ceo-open-state-participation-tkms-2021-03-02/
[6] Financial Times (2021): Thyssenkrupp to float TKMS this year. [Online] Available at: https://www.ft.com/content/c6d017b6-5952-4c2c-9a32-863382c740d2
[7] Bloomberg (2021): Thyssenkrupp cuts revenue forecast for the current fiscal year. [Online] Available at: https://www.bloomberg.com/news/articles/2021-02-25/thyssenkrupp-cuts-revenue-forecast-for-current-fiscal-year
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