Price gap of ‘green’ and ‘gray’ steel to close steadily until mid-2030s: Thyssenkrupp

Prices of reduced carbon emission steel and conventional steel will continuously align until the 2030s, Thyssenkrupp CEO Miguel Ángel López Borrego said Feb. 2.

At a public shareholder meeting, Lopez said that customers of the German steel unit of Thyssenkrupp would understand that prices of lower carbon emission steel would be at a premium, particularly once it will be produced with green hydrogen.

“However, also gray steel will become more expensive with rising carbon costs,” Lopez said.

Platts assessed the current premium of carbon-accounted HRC at Eur140/mt Feb. 2., up Eur15/mt day on day.

One of the main costs will be green hydrogen, and the company aims to run its new direct-reduced iron plant, which will replace one blast furnace, to be fully run by green hydrogen by 2029. Thyssenkrupp will finalize tenders for the supply this year. Lopez added that he expects Thyssenkrupp to form more joint ventures for hydrogen in the years to come.

 

Steel JV talks progressing

Shareholders of Thyssenkrupp, which owns Germany’s biggest steelmaker, Thyssenkrupp Steel, questioned the availability of energy for the decarbonization of the steel operations.

“The energy question is the key question,” Lopez said. “That’s why we are favoring a JV with EPH.”

He said that the current favorite option for the steel unit would be a joint venture with Czech energy provider EPH owned by Czech billionaire Daniel Kretinsky. He refused to elaborate on the ongoing talks despite requests by multiple shareholders at the event.

Lopez also said Thyssenkrupp would still be looking at a plan B if the JV would fail but said he would not expand on the alternative.

Thyssenkrupp will be spinning off its steel unit no matter of more government funding to decarbonize the steel industry. The tinplate plant Rasselstein will also be part of the steel JV. The company will invest Eur3 billion in the decarbonization of the steel unit, which includes the support of Eur2 billion from the German government.

The Thyssenkrupp steel mill accounts for 2.5% of Germany’s entire CO2 emissions.

 

Previous attempts at deals

Thyssenkrupp has had several failed attempts at previous JVs or sales of the struggling steel unit. It ended talks in 2021 about selling its steel unit to Liberty Steel, saying “ideas about the corporate value and the structure of the transaction were far apart” and would drive forward a “sustainable position” for steel on its own.

Prior to that, a steel joint venture with Tata Steel Europe was called off in 2019 following the blocking of the plan by the European Commission without further divestments.

In the fiscal year 2022-23 (Oct 2022-September 2023), Steel Europe shipped 9.4 million mt of steel, down from 9.5 million mt the previous year, while lower spot steel prices caused sales to fall 6% year on year to Eur12.4 billion. In particular, high raw material and energy costs in the first half of the year affected earnings.

Author: Laura Varriale, laura.varriale@spglobal.com

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Klaus Keysberg to step down as thyssenkrupp CFO

Klaus Keysberg, chief financial officer of thyssenkrupp AG, has decided not to put himself forward for a contract extension, with his current term running till 31 July 2024.

Keysberg has worked almost 28 years in various management positions in the thyssenkrupp group, most recently as a member of the executive board of thyssenkrupp AG, since October 2019. Before that, he was executive at steel distribution unit thyssenkrupp Materials Services for seven years.

He turned finance chief in April 2020 and held that position during the tenure of Martina Merz, who stepped down as chief executive in spring. During that period, Keysberg became the group’s second face to the public, as it was mostly he who moderated annual and quarterly results conferences, regularly attended by Kallanish.

The personnel committee of the group’s supervisory board has started the search process in order to be able to propose a successor as soon as possible.

Christian Koehl Germany