TKMS Seals Special Steel Pact as Canada’s C$60 Billion Submarine Decision Nears

ThyssenKrupp Marine Systems orders 70 tonnes of specialized non-magnetic steel from Valbruna, advancing supply chain certification for Canada's C$60B submarine project against Hanwha Ocean.

The race to build Canada’s next-generation submarine fleet has moved from PowerPoint decks to the supply chain. ThyssenKrupp Marine Systems has awarded Italian steel specialist Valbruna ASW a first order for roughly 70 tonnes of non?magnetic submarine steel – a tangible step toward the Canadian Patrol Submarine Project even as a final contract remains elusive.

The order covers material procurement and supply?chain testing aimed at certifying a specialised steel grade against the standards of Germany’s defence research institute, DNV classification rules and German naval construction codes. TKMS also signed a cooperation agreement with Valbruna, a member of the Acciaierie Valbruna group that produces special?grade steels and nickel alloys, to deepen collaboration on melting and production of the non?magnetic alloy. The metal’s ability to reduce a submarine’s magnetic signature is critical to survivability; without a qualified source, no bidder can present a credible offer.

Canada is seeking up to twelve conventionally?powered submarines capable of operating under ice for the Royal Canadian Navy. The initial contract is valued at more than C$12 billion, with follow?on work across the vessels’ lifecycle potentially lifting the total to C$60 billion. Two bidders qualified in August 2025: TKMS, backed by Germany and Norway, and South Korea’s Hanwha Ocean. TKMS has already submitted a non?binding offer and an industrial package, and the Valbruna agreement is seen as a concrete demonstration of local value?creation and material certification – both factors Ottawa weighs heavily in its procurement process.

The probability of a TKMS win is a matter of debate. Analysts at mwb research put the odds at 70%, while TKMS management itself offers a more cautious 50/50 prognosis. Hanwha could deliver ships faster, but TKMS can argue that a German?designed fleet would standardise NATO submarine operations, simplify maintenance and streamline crew training. The final decision is expected before the NATO summit in July, making the next few weeks the most important catalyst for the stock.

TKMS is not entering the contest from a position of weakness. At the end of March the company’s order book stood at €20.6 billion, already bulging with work including a Norwegian contract for two 212CD?class boats. In the first half of the year revenue reached €1.16 billion, operating profit climbed to €60 million and the adjusted margin came in at 5.1%. Management maintains its full?year guidance of revenue growth of up to 5% and a margin above 6%.

The equity market, however, has yet to catch fire. TKMS shares trade at €76.50, up just under 11% since the start of the year and about 3% over the past seven days. That leaves the stock more than 25% below its 52?week high of €102.90 and still beneath the 50?day moving average of roughly €80. The steel order drew a shrug from traders; the share price was unchanged on the day of the announcement.

mwb research keeps its price target at €125, implying more than 60% upside from current levels. That gap will only close, the analysts argue, once Ottawa turns plans into contracts. The NATO summit provides that trigger. For now, TKMS has done everything it can short of winning the bid – locking in critical materials, lining up certification and proving it can integrate local suppliers. The next move belongs to Canada.