ThyssenKrupp and EP Corporate Group established a 50/50
joint venture to create a high-performance, profitable, and future-oriented
steel company.
- ThyssenKrupp Steel plans to start
replacing its blast furnaces with direct reduced iron plants using green
hydrogen starting in 2025.
- The joint venture aims to accelerate the
green transformation of the steel industry towards carbon neutrality.
ThyssenKrupp
recently announced plans to create a 50/50 joint steel manufacturing venture
with the Czech Republic’s EP Corporate Group and ThyssenKrupp Steel (TKS).
According to the German
group, talks are now ongoing between the two parties for the
sale of an additional 30% stake in the steelmaker, following an April 26
announcement that EP would initially acquire a 20% stake in TKS. However,
ThyssenKrupp did not indicate a prospective timeline for a planned sale of the
additional stake.
The
two parties also agreed not to disclose the financial consideration for the 20%
stake, only that they plan to complete the transaction within
ThyssenKrupp’s fiscal year, which ends on September 30. “Together, we want to
create a high-performance, profitable, and future-oriented steel company that
reduces the costs of decarbonization to a more competitive level and thus
accelerates the green transformation of the steel industry on the way to CO2
neutrality,” TK quoted its executive board chairman, Manuel López, as saying.
Shift to Green Hydrogen Furnaces by 2025
TKS
also indicated that it plans to start replacing its blast furnaces with direct
reduced iron plants using green hydrogen starting in 2025. “They probably came
together over hydrogen,” one industry watcher in Germany told MetalMiner. EP
Corporate Group is part of Prague-headquartered EP Holding, an energy group
with assets across Europe that is also involved in carbon-neutral products.
Steel Manufacturing Capabilities and Potential EC
Involvement
ThyssenKrupp
Steel’s main production site is at Duisburg, in western Germany’s North Rhine
Westphalia State. At present, the site can pour 13 million metric tons of crude
steel per year, which it produces via four blast furnaces and two basic oxygen
furnaces. The plant then casts slab for rolling into hot and cold rolled coil
as well as plate.
Other
products produced by the plant include non-grain- and grain-oriented electrical
steels, along with downstream coated products such as hot dipped galvanized
sheet, tinplate, and pre-painted. Information on its website shows that TKS has
multiple other sites for rolling and downstream services in Germany and Spain,
in addition to sales offices in France and Switzerland.
Liberty Steel Walks Away from €1.5 Billion Steel
Manufacturing Deal
TK
has sought to divest its
steelmaking arm since at least 2015. Liberty Steel expressed
interest in 2021, though a disagreement over the prospective price saw talks
end without any result. At the time, TK sought €1.5 billion ($1.61 billion) for
the asset, while Liberty wanted to take the plant either at no cost or with an
extra payment from the German group.
Tata
Steel also entered into a 50/50 agreement with TK that would see the two
companies merge their businesses. However, competition concerns prompted the
European Commission (EC), the executive arm of the EU, to strike down the
planned tie-up. The German analyst told MetalMiner that the EC is unlikely to
have concerns about a joint venture between EP and TKS, as their businesses do
not intersect. (Changes in global steel manufacturing affect steel prices. Opt
into to MetalMiner’s free Monthly Metals Index report and use it to anticipate
market changes and make strategic steel purchasing
decisions.)