Is Salzgitter Bailing on HKM? CEO Speaks Out This Summer
- *
Salzgitter's Decision on HKM's Future to come by Summer - Salzgitter's Decision on HKM's Future to be Made in Summer
Steel titan Salzgitter is set to decide this summer whether to sell or hold on to its 30 percent stake in HKM, the Duisburg steelmaker. In an event held by the Economic Journalistic Association in Düsseldorf, Salzgitter CEO Gunnar Groebler made his thoughts clear: "We're thoroughly assessing various options for HKM, understanding our responsibility in this situation."
The steel companies Thyssenkrupp (50 percent), Salzgitter, and Vallourec (20 percent) jointly own HKM, which employs around 3,000 people and primarily produces semi-finished products for its owners using two blast furnaces. Stalwarts Thyssenkrupp and Vallourec have expressed their intent to withdraw from the company, leaving Salzgitter to weigh its moves. Prior talks with a potential buyer fell through in February.
No Going Solo
Groebler dismissed the idea of HKM operating independently, stating, "Selling five million tons of steel isn't easy for us, and continuing operations as they currently stand is implausible without major changes.”
He also warned against a hasty shutdown, emphasizing that relocating production takes time and that HKM's steel is crucial to their operations. The CEO squashed any ideas of reducing production through the closure of one blast furnace, citing the significant restructuring such a move would require.
No Rash Moves
The current billion-euro investment in eco-friendly steel production at Salzgitter’s main plant is one factor influencing Groebler's decision-making. He cannot jeopardize the financial stability of the Salzgitter plant by pursuing a potentially reckless venture with HKM.
The CEO was cagey when asked about seeking a partner or investor, simply saying, "We're reviewing our options and will make a decision this summer.”
- Salzgitter
- Steel
- Gunnar Groebler
- Steel Industry
- ThyssenKrupp
- CEO
- Duisburg
Salzgitter's future plans for HKM, a Duisburg-based, Thyssenkrupp-led steel company, are up in the air. With a decision expected this summer, the steel colossus is weighing the pros and cons of selling its 30% stake, seeking to operate independently, or even shutting down the company entirely. As Thyssenkrupp and Vallourec hint at withdrawing from HKM, uncertain times lie ahead for the steelmakers' joint venture [1].
Potential Scenarios
- Potential Sale: Salzgitter may decide to sell its stake to align with Thyssenkrupp and Vallourec's exit intentions. However, a previous sale attempt failed in February 2025 [1][3].
- Closure: If a sale doesn't materialize, HKM might be shut down. Thyssenkrupp has suggested discussing closure options with other shareholders [1].
- Independent Operation: Salzgitter has suggested that operating HKM on its own isn't practical, due to difficulty placing 5 million tons of steel in the market [1].
Industry-Wide Implications
- Capacity Reduction: Thyssenkrupp Steel Europe is streamlining its operations and aims to reduce its steel production capacity from 11.5 million tons to about 8.7-9 million tons in the long term. HKM’s potential separation forms part of their efforts to adapt to more competitive cost positions and maintain sustainability in Duisburg-Nord [3].
- Job Losses and Social Impact: HKM employs around 3,000 workers. Closure or downsizing could result in notable unemployment, as observed during other Thyssenkrupp restructurings leading to thousands of job cuts. Unions and management are reportedly working on managing potential closures through “social contracts” to mitigate social consequences [2].
- Market and Supply Chain Effects: HKM supplies semi-finished steel products primarily to its owners. Its closure or change in ownership structure may impact steel availability and supply chains for Salzgitter, Thyssenkrupp, Vallourec, and the wider German steel market.
The Final Word
Salzgitter's decision on HKM's future will likely revolve around either selling its stake or supporting closure. This move comes at a time of broader steel industry restructuring under market pressure and cost competitiveness, with wide-ranging effects on production capacity, employment, and supply stability in the German steel sector [1][2][3].
- The possible stake sale by Salzgitter in HKM, a steel company based in Duisburg and primarily owned by Thyssenkrupp, could be influenced by the steel industry's financial considerations and market competition.
- The Commission, in light of the ongoing restructuring in the steel sector and the need to protect workers from ionizing radiation risks, has also been asked to submit a proposal for a directive on the protection of workers in the energy-intensive, finance-dependent, and business-critical industries like steel, including industries related to the production and use of ionizing radiation.
