Thyssenkrupp’s Steel Salvage and Materials Service Sell-Off: A Twin Restructuring Takes Shape

Thyssenkrupp abandons Jindal Steel talks, opts for self-funded overhaul with deep capacity cuts, €800M loss forecast, and explores separation of Materials Services.

Thyssenkrupp has shelved months of talks with India’s Jindal Steel International over a majority stake in its steel division, opting instead to go it alone. The decision, announced after negotiations that began last September, shifts the group’s focus to a dual restructuring: a self-funded overhaul of the steel business and a separate shake-up of its trading arm, Materials Services. Investors have already priced in the strategic pivot — the shares have surged 26% over the past 30 days to close at €10.80 on Friday, a 50% recovery from their early-April 52-week low.

On the steel front, the Essen-based conglomerate is pressing ahead with deep capacity cuts. Output will be reduced to around nine million tonnes. Blast furnace 9 is due to go offline in the coming business year, followed by furnace 8 once a new direct-reduction plant is up and running. The long-term goal remains climate-neutral steel by 2045. A new restructuring agreement with union IG Metall, including a basic understanding for the Duisburg Süd site, underpins the timetable. CEO Miguel López argued that conditions for a profitable standalone future had not been this favourable in years, citing the EU’s growing recognition of steel’s strategic importance and its promise of tougher anti-dumping measures.

Yet the overhaul carries a heavy price tag. For the 2025/2026 business year, management expects an adjusted operating loss of up to €800 million. The most recent half-year adjusted operating profit, however, came in at €211 million, boosted by early cost savings. The group will publish its first-half figures for fiscal 2025/2026 on May 12, and both López and CFO Axel Hamann are scheduled to address analysts the same day. Market consensus points to a revenue decline to roughly €8.1 billion for the period.

Meanwhile, Materials Services — the division that generated €11.4 billion in sales last year — is facing its own discipline. Management is exploring multiple separation scenarios, according to insiders: a full sale, a spin-off, an initial public offering as early as this autumn, or the establishment of a limited partnership with shares (KGaA), which would allow Thyssenkrupp to retain control even after a partial sale. CFO Hamann is also driving an artificial intelligence push within the unit, aiming to streamline supply chains and improve customer service.

Acute pressure is coming from the Asian steel flood. Cheap imports now account for more than half of European demand for electrical steel. Thyssenkrupp’s French subsidiary in Isbergues will halt production entirely from June through September, leaving about 600 workers directly affected. The company is banking on new EU trade protection measures expected to kick in from July to stem the tide.

Beyond the statutory numbers, investors will press for concrete timelines on May 12. They want to know when the planned transfer of Thyssenkrupp’s HKM stakes to Salzgitter will be finalised — a move targeted for June — and how the materials services process will unfold. With the Jindal option off the table and a self-reliance strategy now in full swing, López and Hamann have a packed agenda to convince the market that the internal confidence they have communicated reflects real financial substance.