Thyssenkrupp’s Split Personality: Submarine Windfalls Mask Steel’s Deepening Woes

Thyssenkrupp’s naval unit secures billion-euro orders while its steel division struggles with shrinking demand, cheap imports, and green transition costs, dragging shares 9% lower in 2025.

The German industrial conglomerate is living two lives. One division is chasing multi-billion-dollar naval contracts from Brasília to Ottawa, while the other is fighting for survival in a steel market that has lost a third of its demand since 2017. Investors, however, are only paying attention to the loser.

Shares in Thyssenkrupp closed the week at €8.82, a level that puts the stock nearly nine percent in the red since January. More tellingly, the equity now trades a full ten percent below its 200-day moving average of €9.83 — a technical signal that the market sees little near-term relief from the steel division’s structural headaches.

A Steel Market Under Siege

The numbers coming out of Duisburg are stark. First-quarter crude steel production crept up to 9.3 million tonnes, but the German Steel Federation warns against reading too much into that figure. On an annualized basis, output remains below the 40-million-tonne threshold needed for healthy capacity utilization. Since 2017, the domestic market has shrunk by roughly a third.

The cost of greening the blast furnaces only adds to the pressure. Thyssenkrupp is pouring capital into transforming its steel operations toward low-emission production, yet revenues remain squeezed by cheap imports and structural overcapacity. The group’s operating profit in the most recent quarter came in at €211 million — respectable given the headwinds, but hardly enough to offset the drag from steel.

Brussels may offer a lifeline. Negotiators agreed in mid-April to slash the volume of tariff-free steel imports into the European Union by nearly half, to around 18 million tonnes, starting in July 2026. At the same time, the proposed levy on excess volumes would double to 50 percent. The deal still needs formal approval from the European Parliament and Council, but if enacted, it would give German mills some breathing room.

TKMS: The Order Book That Keeps Growing

The contrast with Thyssenkrupp Marine Systems could not be sharper. The naval subsidiary, which listed independently last October with Thyssenkrupp retaining a 51 percent stake, entered the current fiscal year with an order backlog of €18.7 billion. That figure has since swelled further.

Brazilian President Luiz Inácio Lula da Silva used the Hannover Messe trade fair to signal interest in four additional frigates based on TKMS’s Meko platform, on top of the four vessels already under construction for the Brazilian navy. In India, a deal for six submarines worth around $8 billion moved closer after Defense Minister Rajnath Singh visited the company’s Kiel shipyard. The so-called P-75I project would add another massive line item to the order book.

Canada represents the next big deadline. TKMS must demonstrate binding industrial partnerships by April 29 for a submarine program that could run into the billions. On June 24, the German parliament’s budget committee is expected to decide on funding for the F127 frigate program, where TKMS is considered the preferred bidder.

A Quiet Period and a Technical Test

The company has entered a communications blackout ahead of its half-year results, due on May 12. That report will for the first time quantify whether the naval division’s earnings can meaningfully offset the steel unit’s losses.

Technically, the stock is oversold — the relative strength index sits at 33 — but that alone does not signal a reversal. The €8.80 area has provided some support, and a hold there would at least give the market a base from which to react to the May 12 numbers. A break below that level would darken an already gloomy chart picture.

For now, Thyssenkrupp remains a tale of two businesses moving in opposite directions, with the market betting that steel’s gravity will prove stronger than any submarine-powered lift.