14 July 2026 – No steel deal without a dowry: anyone who thought industrial consolidation in Germany followed market economy principles is being taught otherwise by the HKM case. Base metals stabilize on the SHFE and LME.
Base Metals Stabilize
Asian base metals were stable today and mostly traded sideways. Aluminum futures on the SHFE showed a positive trend, gaining a solid 1.35%.
At the start of trading on the LME, aluminum also showed positive momentum and was up slightly more than 1%. The other base metals moved sideways with a stable trend.
HKM Takeover: Steel in Germany Now Works Only with Taxpayer Money
No deal without a dowry: anyone who thought industrial consolidation in Germany followed market economy principles is being taught otherwise by the HKM case. Salzgitter AG is taking over the troubled Duisburg steelworks from Thyssenkrupp and Vallourec, but is not paying a single euro for it. On the contrary, the current owners are paying a dowry to get rid of the plant. Taxpayers are contributing another EUR 200 million so that old blast furnaces can be replaced with an electric arc furnace. And because the planned reduction from 3,000 to 1,000 employees will trigger further social plans, this is likely to be only the beginning.
The pattern is not new. It is the pattern of German and European steel policy as a whole: no deal without a dowry, no transformation without subsidies, no downsizing without public support. Competition? Market consolidation? Nowhere to be seen.
Green Steel Will Not Be Available for the Foreseeable Future
Salzgitter CEO Gunnar Groebler is selling the HKM takeover as “part of the green transformation.” That sounds good, but it is only half true. Genuine green steel requires hydrogen, which will not be available in sufficient quantities in either Duisburg or Salzgitter’s main plant for the foreseeable future. The direct reduction plant there will continue to run mainly on natural gas for years. This is not green steel. At best, it is blue steel with a green label.
And while domestic producers collect subsidies under this cover, other regions of the world are already significantly expanding their green steel capacities. How dare they be so innovative and, above all, so fast? Europe’s lead in the narrative could turn out to be an illusion purchased at great expense.
Thyssenkrupp: Going It Alone on Borrowed Money
At the same time, the sale of Thyssenkrupp’s steel division to Indian investor Naveen Jindal failed in May 2026, euphemistically communicated as a “pause.” Thyssenkrupp is now going it alone, financed by the billions generated from the sale of its elevator business. That money can be burned for a while longer, but it is not a strategy.
The central question of whether the steel division will ever earn its cost of capital remains unanswered. Instead, the business is being restructured, jobs are being cut, and state aid is being requested.
A Subsidy Spiral with No Way Out
What is visible at HKM and Thyssenkrupp applies to the entire EU steel industry: consolidation now works only through transfer payments. This creates the wrong incentives, keeps unprofitable structures alive, and burdens taxpayers for an industry that has postponed doing its homework for decades.
Anyone who calls this a market economy is wrong. It is organized redistribution and the state-approved prolongation of insolvency.
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