23 August 2022 – Germany’s largest steel producer, thyssenkrupp, which has been rescued several times by billions in taxpayers’ money and is therefore almost a state-owned company, seems to be in trouble again in some areas. Market participants report that some divisions are already resorting to dumping methods. Base metals continue to be friendly. And scrap prices are rising again due to concerns about shortages.
Germany’s largest steel producer in trouble (again)?
Yesterday, thyssenkrupp shares fell sharply once again and crossed the 38-day line to the downside. The group has thus lost almost 80% of its share value in the last five years.
Business development really positive?
Germany’s largest steelmaker had recently struggled badly with the rise in raw material and material prices, according to a press release on business development in the 3rd quarter of the 2021/2022 financial year dated 11 August 2022.
Materials Services and Steel Europe were able to report an increase in sales due to higher material costs, it continues, but lost significant sales volumes.
The announcement by the group to reduce its net working capital is also being received with very mixed feelings by the market. Especially since the thyssenkrupp Materials Services division is desperately in need of cash, according to market sources.
How desperate is thyssenkrupp?
In the past, thyssenkrupp has repeatedly attracted attention in the European market for failing to get a grip on its steel and raw materials divisions despite billions in rescue packages from taxpayers’ money. Apparently, the problems are now again so big that, according to market participants, they are now trying to resort to dumping methods.
Many market participants have been questioning for years whether such dumping methods have to be refinanced by the German state and the European Union with money from the taxpayers’ pockets.
Base metals continue to show positive performance
Base metals in Asia continued to show positive signs today and rose again. Iron ore, coke, HRC and stainless steel are also up, in some cases by more than 2%.
On the European commodity exchange LME, base metals started today with slight gains or sideways movements.
Supply bottlenecks for scrap?
Recently, scrap prices on the LME had risen by more than 10% in some cases. Higher prices are also being reported from the European spot market for scrap. In the stainless steel scrap sector, prices are pointing to a recovery and further increase. Chinese spot prices for stainless steel rose by almost 3% today. The background for the price increases is currently assumed to be that scrap could become scarce in many places due to logistical challenges.
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