Thyssenkrupp chief demands European Steel Content tender quota
The head of thyssenkrupp Steel, Dennis Grimm, has called for a “European steel content” quota in public tenders.
His plea is linked to the €500 million ($583m) “Special Federal Budget for Infrastructure” launched by the German government. The spending only makes sense if the tenders require the use of steel made in the EU, which is not the case yet, he says. “It would be grotesque if the German special fund becomes a booster for imported steels that were subsidised in China,” he notes in a guest article for business weekly Wirtschaftswoche.
“Grotesque” is the word he also uses for the fact that the EU still allows the import of Russian slab into Europe. By doing so, Europe is helping finance Russia’s aggression, while domestic mills need to cut back their workforce, he argues. “I am lacking the imagination on how to bring this home to my employees,” he writes in the article seen by Kallanish.
Grimm identifies three main issues on which policymakers must act as soon as possible. Apart from a European content quota, he names the Carbon Border Adjustment Mechanism (CBAM) and trade protection against subsidised imports. Here he refers to the tangible proposal from the European Commission to halve the current import quota, and to impose a 50% duty on imports above the limit.
“Eleven countries are supporting this proposal, but not Germany, the number one steel producing country”, for concern of rising prices for consumers, Grimm points out. However, these costs would be manageable, with approximately €50 more for a passenger car, and €1 more for a washing machine.
“We can live with that, rather than with the demise of entire value chains, which would then be irreversible,” Grimm warns.
Christian Koehl Germany
Thyssenkrupp Steel calls for effective trade protection against cheap imports
The European steel industry faces a defining moment as global overcapacity and cheap imports threaten its future. In a guest article for German weekly business news magazine WirtschaftsWoche, Dennis Grimm, spokesperson of the Executive Board of German steelmaker thyssenkrupp Steel, issued a strong call for effective trade protection, a robust Carbon Border Adjustment Mechanism (CBAM), binding “European Content” quotas, and structural reforms to keep Germany and Europe competitive.
Mr. Grimm warned that blast furnaces across Europe are being shut down due to shrinking demand and fierce global competition. Transformation projects and new investments are being postponed, while jobs vanish at an alarming rate. The ripple effect extends beyond steel, hitting automotive, chemicals and mechanical engineering sectors. Grimm stressed the need for a clear strategy as China and India have shifted from partners to competitors, with China emerging as a systemic rival.
Global steel overcapacity is projected to reach 700 million mt – six times EU’s total demand. Much of this comes from China, where steel is subsidized up to 10 times more than the OECD average. Grimm argues that without protection, European producers stand no chance against such dumping practices.
Adding to the pressure, the EU-US tariff deal has fixed a 50 percent import tariff into the US, diverting even more global steel excess to Europe while closing export routes for EU producers. “Doing nothing in the face of overcapacity would have catastrophic consequences for Europe’s steel industry and its value chains,” Grimm warned.
The three urgent measures
- Effective Trade Protection
- Robust Carbon Border Adjustment (CBAM)
- “European Content” Quotas
Brussels has proposed halving duty-free import quotas and applying a 50 percent tariff on excess imports. Eleven EU states support the plan – but Germany has yet to follow.
Grimm criticized loopholes in current CBAM rules, which allow circumvention. He stressed extending CBAM to processed steel products and maintaining free EU ETS allocations until reforms take effect.
To avoid subsidizing foreign producers with domestic funds, Grimm urged binding quotas ensuring public procurement uses a fair share of EU-made steel.
Grimm revealed that thyssenkrupp is losing contracts to non-European competitors offering steel up to 50 percent cheaper.
Thyssenkrupp to axe 11.000 jobs, reduce capacity
Thyssenkrupp Steel says it will cut around 5,000 jobs in production and administration by 2030. A further tranche of 6,000 jobs is to be transferred to external service providers or shed through the sale of business activities.
The steelmaker will lower annual production to 8.7-9 million tonnes, from 11.5mt currently. The reduced volume corresponds to shipments in the previous financial year.
Such a reduction is “in line with market conditions, thus adapting capacities to future market expectations,” it says in a press release sent to Kallanish. The figures are the cornerstones of a key issues paper on the company’s future strategic set up, which was announced previously.
Tk Steel’s separation from Hüttenwerke Krupp Mannesmann (HKM) remains a key element in the capacity reduction. The primary objective is to sell the shares in HKM. If a sale is not possible, tk Steel will hold talks with the other shareholders about mutually acceptable scenarios for the plant’s closure – the first time this option has been explicitly mentioned.
In addition, a processing site in Kreuztal-Eichen is to be closed.
“Comprehensive optimisation and streamlining of our production network and processes is necessary to make us fit for the future. We are aware that this path will demand a great deal from many people,” says tk Steel chief executive Dennis Grimm.
“In terms of operational efficiency and profitability, we still have some catching up to do in key competitive areas. We need to close these gaps if we want to look forward to a positive future,” adds Marie Jaroni, chief transformation officer.
The company maintains that it remains committed to the green transformation and carbon-neutral steel production, and is holding firmly to its intended plan of completing the direct reduction plant that is under construction. A decision on building another DRI plant will only be taken at a later date and under the economic, technological, and political conditions that apply at that time, tk Steel says.