How Global Trade Pressures are Impacting thyssenkrupp

German steelmaker thyssenkrupp is implementing production cuts across its French operations, with thousands of jobs hanging in the balance. The strategic retrenchment reflects broader challenges facing European manufacturers as cheaper Asian imports flood the market, fundamentally reshaping competitive dynamics in the steel sector.

An increase in steel imports to the European market has displaced domestic production, undermining the business case for maintaining high-capacity operations. The company's struggle to stabilise European production in 2024 highlights the sales and operational pressures confronting traditional industrial players.

Market pressures reshape industry dynamics

Global trade turbulence has forced companies and governments worldwide to reassess their sourcing strategies, with profound implications for business growth. Trade tensions have transformed core commodities like steel into strategic tools for redefining supply chain relationships.

According to industry analysis, Chinese oversupply has already pushed UK steelmakers out of domestic markets, triggering financial distress and operational shutdowns that now reverberate across Europe.

thyssenkrupp operates as an international industrial and technology group spanning automotive technology, decarbonisation technologies, material services, steel and marine systems. The thyssenkrupp Steel Europe (TKSE) division develops steel innovations for diverse applications, focusing on customer-specific materials solutions and materials-related services.

The company's thyssenkrupp Electrical Steel unit represents one of Europe's two producers of grain-oriented electrical steel, a critical material for transmitting electricity from power plants to households. This product holds particular significance for the energy transition, making European production capacity strategically important for regional autonomy.

However, rising import volumes have eroded European production levels, destabilising the regional supply chain and creating significant employment uncertainty. Since January 2025, the Isbergues site in Northern France has operated at half capacity due to weakened demand for European-made steel.

In December 2025, the company announced a temporary shutdown of electrical steel production in Europe, a material used in wind turbines and power grids, as cheaper Asian imports captured market share.

Strategic response to competitive threats

“Grain-oriented electrical steel is indispensable for Europe's energy infrastructure and the energy transition,” TKSE CEO Marie Jaroni says. “We are strongly committed to maintaining production in Europe and are currently working to ensure effective market protection in order to guarantee fair competition for this strategically important product.”

Initially, the plant was scheduled to operate at 50% capacity for at least four months. This timeline has now been extended as the company confronts deepening operational challenges.

thyssenkrupp Electrical Steel has announced further cuts at Isbergues, signalling an escalating import crisis for grain-oriented electric steel. The company confirmed total closure for the Isbergues site from June to September.

“In view of the ruinous flood of imports in the market for grain-oriented electrical steel, we see no alternative but to temporarily shut down our French site once again,” says Angelo di Martino, CEO of thyssenkrupp Electrical Steel.

“This measure is necessary to stabilise our company amid further deterioration in order intake. We are faced with import prices that in some cases lie well below production costs in the EU. We therefore urgently need appropriate trade protection to establish fair competitive conditions for this strategically important product.

“This also concerns around 1,200 skilled jobs, which we aim to safeguard at our sites in Gelsenkirchen and Isbergues. We are engaged in intensive and constructive dialogue with the European Commission and hope for the prompt introduction of effective safeguards. Currently, there is no effective protection. At the same time, we are doing everything within our control to strengthen our competitiveness.”

Growth prospects undermined by pricing pressures

Grain-oriented electrical steel remains crucial for producing energy-efficient transformers and large, high-performance generators. Despite this strategic importance, the European market faces substantial pressure from surging import volumes of cheaper materials entering unchecked at prices considerably below EU production costs.

According to industry estimates, imports have tripled since 2022, with a further 50% increase in 2025. More than 50% of the European market now comprises imports, dramatically reducing order volumes at European production facilities and severely impacting capacity utilisation.

According to market forecasts, global demand for grain-oriented electrical steel could triple by 2050, potentially offering significant growth opportunities. However, if cheaper alternatives remain readily available, European firms may struggle to capture this expansion, threatening long-term business viability and strategic positioning in a growing market.