EU policy strengthens thyssenkrupp's position at Jindal talks: Lopez Borrego
The increasingly favorable political environment in the EU is improving the valuations of steel companies and playing into thyssenkrupp's hands during negotiations to sell a stake in its Steel Europe business to India's Jindal Group, says thyssenkrupp group executive director Miguel Lopez.
The CBAM fully entered into force on January 1, and the new steel trade regime in the EU, which will replace the existing guarantees, is expected to enter into force on July 1.
"Over the past four months, the mood has become positive. We are seeing an increase in stock prices (by a ratio of 5:0) by about 50% or more. So the mood is clearly positive," Lopez said during thyssenkrupp's earnings release on Thursday, which was followed by Kallanish.
"It is also obvious that this is due to the tariff situation, as mentioned earlier, as well as the limitation of the import quota for Europe. And, of course, the idea of resilience – I have already told you, you remember the steel summit with the participation of[German]Chancellor[Friedrich]Merz, as well as the negotiations that we held directly with the[European Commission President]By Ursula von der Leyen and her team. So, yes, there is a clear positive attitude here. And, of course, this will undoubtedly contribute to the negotiations with our colleagues from Jindal, there is no doubt about that," he added.
According to him, the German industrial conglomerate continues "intensive" negotiations with Jindal on conducting a comprehensive audit. His goal remains to sell a controlling stake to an Indian group.
CBAM and the new trading regime have not yet had a tangible impact, but they have the potential for growth.
"It is expected that after the introduction of tariffs in Europe, we will see an improvement in pricing," Lopez said. "As well as CBAM – specific CBAM actions, I believe, will also help. We won't see anything this fiscal year, as we expect the European Union to make a decision on tariffs sometime in May or June. Until then, everything really depends on the orders; we will surely see the effect in the next fiscal year. But the probability that we will see any positive effects this fiscal year is, in our opinion, very low at the moment."
Work at the direct recovery pig iron plant in Duisburg continues "with full dedication," he noted. The formwork and reinforcement works have been completed, as well as the main concreting works of the DRI plant tower and two melting furnaces, as well as large-scale construction work on the technical infrastructure of the plant.
Author: Adam Smith
Kallanish.com