Thyssenkrupp targets expansion of US distribution activities

Thyssenkrupp is seeking an expansion on the North American market for its steel and materials distribution division, Materials Services.

At the firm’s annual press conference on Thursday, chief financial officer Klaus Keyberg confirmed these ambitions to Kallanish. They were reported earlier in a newspaper interview with chief executive Martina Merz. Thyssenkrupp is thus treading the same hunting ground as the other big German steel distribution group, Klöckner & Co.

The North American market “…is very much fragmented, with low market shares for each of the players, and much consolidation activity going on,” Keysberg explained. In addition, he noted that margins “…are just much better” Stateside, and that additional services like processing “…are much better paid than in the EU”.

Unlike its steel production division and some of the other activities within the conglomerate, Materials Services is the sole unit thyssenkrupp AG decidedly wants to hold on to, and expand.

In the fiscal year ending 30 September 2020, thyssenkrupp’s overall shipments were lower year-on-year in all regions and operating units. This is partly due to the absence of group-internal direct-to-customer business, which was partially transferred to tk Steel Europe in the prior year.

In total, Materials Services sold 8.7 million tonnes of materials in the reporting period, -11.4% less than in the prior year. With the exception of the volatile nickel price, prices in all main product segments were lower on average than a year earlier.

Order intake and revenue were each at around €11.3 billion ($13.4 billion), each -18% down year-on-year. Ebit was negative €733 million, versus positive €88m a year earlier.