Steel production drops by half

The world economic crisis has officially reached the German steel industry. New statistics published on Tuesday revealed that only half as much steel was produced in March as in the same month last year.

Steel production drops by half
Photo: DPA

The Federal Statistical Office (Destatis) reported that Germany’s smelting works had produced 1.28 million tonnes of pig iron – or raw iron – and 2.1 million tonnes of crude steel in March this year.

These numbers ring in at 50.3 percent less pig-iron and 49.8 percent less crude steel than in March 2008. They also amount to a reduction of 14.2 percent and 17.5 percent respectively since February.

“This is the biggest drop since 1990,” one statistician said. Reports say that the industry is suffering from a shrinking demand in the auto and machine industries.

Germany’s market leader ThyssenKrupp announced job cuts for about 5,000 contract workers recently. Some 10,000 ThyssenKrupp workers protested against the mass redundancies in Duisburg on Monday.

The ThyssenKrupp share price dropped from €15.53 to €14.85 on the XETRA share index before midday on Tuesday.


German steel giant rejects ‘high cost’ state support

German industrial giant Thyssenkrupp on Friday rejected state participation to support it during the pandemic, an option favoured by unions but judged too costly by management.

German steel giant rejects 'high cost' state support
Thyssenkrupp's offices in Duisberg. Photo: Ina Fassbender / dpa / AFP
“State participation off the table,” Klaus Keysberg, the group's financial director, told the German daily Rheinische Post on Friday.
Keysberg blamed “high costs” in the long term of government assistance, “due to the interest payments and the terms of repayment.”
Already weakened by years of cut-price competition from China in the steel industry, Thyssenkrupp has further struggled with the effects of the pandemic that caused business activity to plunge.
The company said in mid-November it would cut an additional 5,000 jobs as part of its restructuring plan, bringing the total to nearly 11,000, to be spread out over several years.
Thyssenkrupp chief executive Martina Merz has not ruled out state assistance.
The powerful IG Metall union had organised rallies in October to demand a rescue plan from Berlin.
But the government was never enthusiastic, despite their acquisition of stakes in the airline Lufthansa and tour operator TUI, which also had business ravaged by Covid-19.
“I don't believe that nationalisation is the right response at the moment,” Germany's Economy Minister Peter Altmaier said in October on Thyssenkrupp.   
But national and regional governments favour more traditional aid structures, such as subsidies, or moves to convert to production of so-called green steel.
Discussions will continue to find alternatives.
A takeover of Thyssenkrupp's steel activities is still on the cards. British steel giant Liberty, founded by industrialist Sanjeev Gupta, launched a takeover bid in October.
Discussions are also underway with Sweden's SSAB and India's Tata Steel.
An alliance with fellow German steelmaker Salzgitter to create a national steel champion is also being considered. But these options won't be decided until “spring 2021”, Thyssenkrupp said.