Thyssenkrupp Shares Under Pressure as Steel Sector Confronts Energy Crisis

Thyssenkrupp's stock plunges 31% in a month as soaring oil prices raise costs and cheap steel imports pressure European operations, amid political debate on energy policy.

A surge in oil prices, driven by escalating tensions involving Iran, has created a highly challenging environment for Thyssenkrupp. The German steelmaker is grappling with soaring production costs at a difficult moment, while its European operations face intense competition from cheaper imports. Reflecting these pressures, the company's share price recently touched a new 52-week low of 7.46 euros.

Market Skepticism Over Policy Responses

The precarious state of core German industries has ignited a political debate. Chancellor Friedrich Merz has questioned the legally mandated phase-out of coal power by 2038, suggesting coal plants might need to operate longer to ensure energy security for industrial consumers. Concurrently, the federal government is preparing a fuel price relief package and considering the release of portions of the national oil reserves.

Financial markets have viewed these proposed measures with caution. The difficult climate for cyclical industrial stocks was underscored recently when Raiffeisen significantly lowered its growth forecast for 2026. Thyssenkrupp's equity performance illustrates the severity of the situation: the stock has declined approximately 31% in the last 30 trading days alone and now trades nearly 44% below its October peak of 13.24 euros. Analysts suggest the share will remain under significant pressure until oil prices retreat and import competition eases.

The Dual Burden of Rising Energy Costs

Global oil markets are experiencing substantial stress. According to the International Energy Agency, worldwide supply is currently short by about 11 million barrels per day. Brent crude has climbed to around 113 US dollars per barrel, with OPEC oil reaching as high as 143 dollars. Research firms, including TS Lombard, anticipate the Middle East conflict could persist for months, which is expected to keep risk premiums elevated for the foreseeable future.

For an energy-intensive producer like Thyssenkrupp, this translates directly into higher operational expenses. These cost pressures are compounded by reports of extended production cuts at its French site, where increasing volumes of low-cost imported steel are exacerbating the strain on profitability.