Thyssenkrupp Steel Europe, subsidiary of German steelmaker Thyssenkrupp Steel, is breaking its economic link with Hüttenwerke-Krupp Mannesmann (HKM), the joint venture between Thyssenkrupp Steel, German steelmaker Salzgitter and French pipe manufacturer Vallourec.
The company has announced that it has decided to terminate the supply contract with HKM. As a result, Thyssenkrupp Steel Europe’s obligation to purchase around 2.5 million mt of steel per year will expire on December 31, 2032, at the latest.
Last year, Thyssenkrupp Steel had declared that it intended to divest its stake in HKM as part of its restructuring plan, while the negotiations with Hamburg-based CE Capital Partners on the sale of Thyssenkrupp shares in HKM failed, as SteelOrbis previously reported.
“Due to market conditions, we will have to reduce our production capacities in the long term from the current 11.5 million mt of steel to a shipping target of 8.7 to 9 million mt. The separation from HKM is therefore imperative for us in order to achieve a competitive cost position, to maintain our location in Duisburg-Nord, and to make Thyssenkrupp Steel economically robust and geared up for the future. Irrespective of the termination of the supply contract, the sale of the shares in HKM remains our preferred option. We are open to discussions with all serious interested parties,” Dennis Grimm, spokesman of the executive board of Thyssenkrupp Steel, said.
