Thyssenkrupp banks on steel production recovery

Thyssenkrupp Steel Europe plans to improve its capacity utilisation going forward, following painful losses in its third fiscal quarter through June.

During the earnings call of parent thyssenkrupp AG, chief financial officer Klaus Keysberg said the steel plants saw production dip -38% at the beginning of the Covid-19 lockdown. Utilisation has meanwhile recovered to between 60% and 70%, he told Kallanish upon request. The idled blast furnace at Hüttenwerke Krupp-Mannesmann (HKM) is meant to come back on stream, he added.

The group nevertheless remains very cautious with predicting a clear improvement for tk Steel Europe. It says it “…expects almost all businesses, with the possible exception of Steel Europe, to report a stable performance or a slight quarter-on quarter improvement in the fourth [fiscal] quarter.”

The group suffered an operating loss (adjusted Ebit) of €679 million ($804m) in the June quarter. In the nine months through June, the loss was €1.2 billion, with Steel Europe alone accounting for €706m. Keysberg conceded that those steelmakers that depend on the automotive industry have been hit harder by the pandemic than others. Still, he maintained that the company’s focus on automotive-grade steels remains promising in the long run.

The steel unit generated a positive cashflow for many years, and the enhanced investments announced in May will keep it fit and competitive, Keysberg observed. He did not comment on speculation about partnerships with other steelmakers, but said that talks are being continued in this regard.