Thyssenkrupp's Shield and Sword: EU Tariffs and a €25 Billion Exit

Thyssenkrupp pauses production due to cheap Chinese imports, as EU prepares 50% tariffs. Its future hinges on a major elevator sale and green tech.

While Thyssenkrupp showcases its green technology credentials at the Düsseldorf "Tube 2026" trade fair, the industrial giant is navigating a severe operational crisis. The company is being forced to idle production lines, even as it positions for a potential €25 billion windfall and a newly fortified European market.

The immediate pressure stems from a flood of Chinese imports. Shipments of grain-oriented electrical steel, a critical material for Europe's power grid expansion, have tripled since 2022. This price undercutting has made European production unviable, forcing Thyssenkrupp to pause operations. Its plants in Gelsenkirchen, Germany, and Isbergues, France, are entering a forced hiatus, with the French facility facing a complete shutdown from June through September. Approximately 1,200 employees are affected by these measures.

Investor sentiment reflects this fundamental weakness. The stock closed at EUR 8.39 on Monday, marking a year-to-date decline of over 13%. The share price languishes well below its 52-week high of around EUR 13.

In a decisive move to shield its beleaguered industry, the European Union is enacting sweeping trade protections. From July 1, 2026, the annual quota for duty-free steel imports will be slashed by 47% to 18.3 million tonnes, down from 2024 levels. Any imports exceeding this limit will face a prohibitive 50% tariff. This "Fortress Europe" strategy aims to make excessive imports unprofitable and boost capacity utilization at domestic mills, which recently hovered around a weak 67%.

However, the market's initial reaction to this political backing was tepid, with shares drifting lower despite the announcement. Broader sector skepticism appears to outweigh the positive regulatory shift. Furthermore, a notable loophole remains: a complete EU ban on imports of Russian steel slabs will not take full effect until October 2028.

Amidst this challenging backdrop, Thyssenkrupp's technology divisions offer glimmers of hope. At the same Düsseldorf fair, the group is promoting hydrogen-optimized steels for pipeline networks. Its subsidiary Uhde recently secured a contract from South Korean partner POSCO E&C to modernize a steel mill in Pohang using proprietary emissions-reduction technology.

The company's financial future hinges on two pivotal events in the latter half of 2026. The first is the planned exit from its remaining 16.2% stake in TK Elevator. A direct sale or IPO by the main owners could value the elevator business at up to EUR 25 billion, providing crucial funds for debt reduction and the costly transition to green steel production.

The second is the expected final EU decision on steel tariffs in May or June, paving the way for the new 50% duties. Until these protective measures take hold and the lucrative elevator transaction is completed, management must staunch heavy operational losses in its core steel business through severe cost-cutting. Investors will also scrutinize the interim report due on May 12, 2026, for signs of progress or further strain.