Global giant takes write-down of 25 billion

Germany’s ThyssenKrupp on Wednesday revealed a giant write-down of 2.1 billion euros – 25 billion kroner – of its steel division, due to what it describes as a bleak future, according to Reuters.

ThyssenKrupp has been trying to sell its steel business for several years, and the write-down underlines the challenge of getting the Czech energy company EPH on board as a co-owner of the business.

As a result of the write-down, the giant posted a net loss of 2 billion euros for the fourth quarter. Adjusted operating profit in the July-September quarter fell by 45 percent to 88 million euros.

The shares were down 1.8 percent in pre-trade, but are now up 6.9 percent.

Chinese headache

ThyssenKrupp itself says that they are in constructive talks with EPH about a potential collaboration. EPH is controlled by the Czech billionaire Daniel Kretinsky, and will support ThyssenKrupp Steel Europe with its energy expertise in a possible collaboration, according to the company.

ThyssenKrupp last month warned of a significant deterioration in the steel market, adding that optimistic assumptions had been dampened by a mix of economic weakness in Germany and other markets, as well as higher raw material and energy costs, writes Reuters.

Cheap Chinese steel imports to Europe have caused additional headaches, in addition to Asian competitors not having to bear the costs of CO2 emissions, which puts local players at a disadvantage.

World crude steel production was 150 million tonnes in October 2023, an increase of 0.6 percent from the same month the previous year, according to the World Steel Association.

China’s steel production was 79.1 million tonnes, down 1.8 percent compared to the same month last year. India produced 12.1 million tons, up 15.1 percent year-on-year, while Japan produced 7.5 million tons, up 2.5 percent year-on-year.