‘Weak’ German economy is blamed for steel output cut

GERMANY’S largest steel manufacturer is to scale back steel production by about a fifth in a further blow to the country’s industrial heartlands.

Thyssenkrupp blamed its decision on the “persistently weak” German economy, as it hit out at rising energy costs caused by net zero policies. It also said it was being undercut by Asian imports.

The industrial giant said capacity at its site in Duisburg, in the state of North Rhine-Westphalia, would be cut back from 11.5m tonnes a year to around 9m.

It added that it could not put a figure on job cuts, but has a deal with unions guaranteeing current employment levels until March 2026.

Thyssenkrupp sold €12.4bn (£10.6bn) of steel last year and employs nearly 27,000 people, 13,000 of them at its Duisburg site. The company has spent a decade trying to reduce its reliance on steel manufacturing while building businesses to supply other industries such as shipbuilding and the motor industry.

However, shareholders continue to press management to correct losses at its steel division, once a symbol of Germany’s industrial strength.

It told investors in February that it was reduing its sales and profits guidance as it wrote down the value of its steel business for the second time in three months.

Troubles at Thyssenkrupp echo what is happening across Germany’s once-resilient manufacturing sector, as the IMF forecasts that the country will be the worst performer across the G7 this year.

The economy has been hit by soaring energy prices after being cut off from cheap Russian energy and reduced demand for exports from China.