Thyssenkrupp's Hydrogen-Ready Steel Plant May Run Without Hydrogen as 4,000 Job Cuts Land

Thyssenkrupp closed at EUR 14.10 as softer US jobs data lifted industrials, but its green steel plant may initially run without hydrogen.

Thyssenkrupp shares closed Friday at EUR 14.10, up 2.0%, as softer US labor market data cooled rate-hike fears and lower oil prices lifted cyclical industrials across Europe. The gain extends a 51% advance since the start of the year — a run that has priced in a good deal of faith in the Essen conglomerate's restructuring story.

The harder question is whether that faith is warranted. Two developments this month frame the answer: a steel division that has already cut roughly 4,000 of about 11,000 planned positions, and a flagship green steel project that may not run on green hydrogen after all.

Green Steel's Awkward Pivot

Thyssenkrupp Steel is in talks to adjust the funding framework for its direct reduction plant in Duisburg so the facility can initially operate without hydrogen, according to Reuters. The disclosure cuts to the core of the transformation challenge: the infrastructure and operational hurdles on the path to climate-neutral production remain substantial, and the assumption that the shift could proceed without friction or delay looks increasingly optimistic.

That nuance matters for how the steel unit's mid-term targets should be read. At the division's Capital Market Day, management reaffirmed an adjusted EBITDA target of at least EUR 1.2 billion, an adjusted EBITDA margin of at least 11%, and a return to a sustainably positive free cash flow. More than EUR 800 million of the earnings improvement is meant to come from internal measures — tighter processes and strict cost discipline.

Headcount Already Moving

The personnel side of that equation is no longer theoretical. Around 4,000 of the roughly 11,000 planned job reductions have been completed. The separation of Hüttenwerke Krupp Mannesmann was wrapped up in summer 2026, and Reuters reports the steel unit is targeting a tripling of core earnings over the medium term as it trims overcapacity and exits loss-making areas.

The cuts extend beyond steel. At thyssenkrupp Automotive Technology, the realignment of the chassis business affects the Essen and Ennepetal sites, where 160 to 180 positions are to be eliminated. The new organizational structure is scheduled to launch on January 1, 2027.

Ownership registers are shifting as well: a voting rights notification showed that Norges Bank reached or crossed a reportable threshold on September 25, 2026.

A Split Analyst Verdict

Opinion on the turnaround is anything but uniform. Deutsche Bank Research's Bastian Synagowitz reaffirmed his Buy rating on September 29 with a EUR 18 price target, calling the steel business the central driver for the group. Jefferies' Cole Hathorn took a Buy rating on September 23 but set a far more defensive EUR 13 target, even while expecting European steel prices to firm over the medium term through 2027.

JPMorgan stayed Neutral on the same day as the Deutsche Bank note, with a EUR 15 target — a spread that captures the market's tug-of-war between hope for a successful realignment and respect for the risks involved.

The Next Test

Since summer, EU trade defense measures have provided some cover for the bloc's steelmakers against persistent import pressure, and falling energy prices offer relief to energy-intensive production. Neither addresses the sector's structural demands: heavy decarbonization investment and the internal surgery the group has committed to.

The next hard checkpoint comes on October 22, when the quiet period begins ahead of the full annual report for fiscal year 2025/2026 on December 8, 2026. Until then, global market factors and the interest rate environment will likely set the tone. The savings and productivity gains have been promised; the coming quarters will show whether they translate into actual business figures.