German steelmaker Thyssenkrupp will search for a joint owner or buyer of its heavy plate mill in Duisburg but consider shutting it down if no taker could be found, CFO Johannes Dietsch said Thursday.
Speaking during a press call on the company’s weak first quarter, running from October 1-December 31, which was hit by a soft auto sector and high raw material costs, Dietsch said the aim would be to find a partner for running the loss making mill. “But if that will not work, closing down is not being ruled out,” he added.
ThyssenKrupp had said previously that the plate business would be “under review.”
Adjusted EBIT for the heavy plate business dropped heavily from a loss of Eur12 million ($13 million) in Q1 2018/19 to a loss of Eur35 million in Q1 of the current financial quarter.
The European plate market is continuing to see excess overcapacity with no expected significant increase in demand. Plate prices saw considerable drops in the first quarter of the company’s 2019-20 financial year, with the weekly Platts TSI index for plate shedding Eur26.50/mt. However, a slow price recovery has be seen since the end of November.
A source close to another European plate producer told S&P Global Platts that it would be difficult to find a buyer for the Duisburg plant as there would not be sufficient synergies with other producers to make a move like this work.
Dietsch also said the company remained open for a merger of the entire steel unit, but would work on restructuring independently of that.
The sudden replacement of the steel unit’s CEO, Premal Desai, by Bernhard Osburg earlier this week resulted from differences over how to achieve the restructuring goals of the unit, Dietsch added.
The steel unit as a whole saw an adjusted EBIT loss of Eur164 million in Q1, down from a profit in the previous Q1 of Eur38 million.
Order intake and sales at the steel unit were down 10% and 13% respectively from the prior year in Q1.
Shipments of cold-rolled material fell 3.9% year on year to 1.48 million mt, while hot-rolled shipments dropped 11.2% to 759,000 mt.
Crude steel production at Steel Europe was stable at 2.17 million mt, while production at semis grew 3.5% to 674,000 mt.
— Laura Varriale