August 19th, 2026 | 07:20 CEST
Billion-Dollar Opportunity in the Steel Transition: thyssenkrupp, Strategic Resources and Siemens Energy in Focus
The European steel industry is facing major changes. EU climate policy is forcing these long-established companies to undergo a radical shift toward low-carbon production, while global competitors have long produced at lower cost. The transition requires the right raw materials and a significant amount of green energy. In the long term, this transformation could become a competitive advantage. The industry must make the right decisions; after all, many jobs—and Europe's independence in steel production—depend on it. We are therefore taking a closer look today at thyssenkrupp, Germany's largest steel producer; Strategic Resources, a potential supplier of raw materials; and Siemens Energy, a potential technology partner.
time to read: 5 minutes
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Author:
Armin Schulz
ISIN:
STRATEGIC RESOURCES INC | CA86277X4093 | TSXV: SR , THYSSENKRUPP AG O.N. | DE0007500001 , SIEMENS ENERGY AG NA O.N. | DE000ENER6Y0
Table of contents:
Author
Armin Schulz
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
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thyssenkrupp: In the midst of a transformation
thyssenkrupp continues to drive its transformation forward with a clear goal in mind. While the extraordinary general meeting approved the spin-off of tk accelis and the steel business is benefiting from stricter EU import rules, other divisions remain a drag. Shareholder approval of tk accelis's spin-off marks another milestone on the path to becoming a financial holding company. The former Materials Services business, with revenue of approximately EUR 11 billion, is set to go public later this year. thyssenkrupp AG will retain a 51% stake, with the remaining 49% distributed to shareholders.
The steel division improved its adjusted EBIT to EUR 73 million in the third quarter, supported by lower raw material costs and the APEX performance program. European steel producers are receiving a boost from the stricter EU import rules in effect since April, which reduced the duty-free quota by 47%. Currently, persistently low water levels on the Rhine are complicating the supply of raw materials to the Duisburg plant. Blast furnace production has been cautiously scaled back while the company switches to external ships with shallower drafts. The planned direct reduction plant for green steel, with a volume of EUR 3 billion, remains a long-term project.
The subsidiary TKMS remains a reliable pillar of growth with an order backlog of over EUR 20 billion and its selection as the preferred supplier for the Canadian submarine program. At the same time, Automotive Technology and Decarbon Technologies are weighing on the overall results. Weak automotive demand and postponed major projects in chemical plant engineering led to revenue declines in these areas. The Group therefore narrowed its earnings forecast to between EUR 600 million and EUR 900 million. For investors, this presents a mixed picture, with strategic progress at tk accelis and TKMS on one hand and operational challenges on the other.
Strategic Resources: Focusing on Green Steel and Energy Storage
The decarbonization of the steel industry requires new production methods and is currently driving demand for specific raw materials. In this environment, Strategic Resources is positioning itself as a major player in the supply of high-purity iron for green steel production. Through its projects, the Canadian company is addressing the industry's core problem. While demand for low-emission direct reduction (DRI) plants is rising, the infrastructure needed to supply high-quality raw materials remains limited. With a fully permitted mining project in Québec and a planned pelletizing plant at the deep-water port of Port Saguenay, the company possesses the rare combination of existing permits and strategic infrastructure. The company is currently awaiting approval to expand the pelletizing plant's capacity from 1.5 million metric tonnes to 4 million metric tonnes.
The flagship BlackRock project in Québec is impressive not only for its longevity, with a planned mine life of 39 years. The project has a net present value of CAD 1.9 billion, corresponding to an internal rate of return of 18.2%. The connection to the power grid and the availability of natural gas give the project a structural cost advantage over existing facilities. At the same time, the company is expanding its geographic reach with the Mustavaara project in Finland. The selection of vanadium-rich magnetite concentrate for the EUR 17 million FutSteel research project, in collaboration with the University of Oulu and SSAB, is a testament to the quality of the material, which is ideally suited for next-generation hydrogen-based steel production.
The production of iron ore pellets is not the company's sole business segment. The Canadian ore deposit yields two additional strategic metals—vanadium and titanium—which significantly expand the value chain. At a time when North America has no primary vanadium production, the project is significantly enhanced by this deposit. It could serve as a potential cornerstone of this critical supply chain. Through a partnership with Tyfast Energy, the company is also tapping into the booming energy storage market. Vanadium redox flow batteries are considered a promising solution for the stationary storage of renewable energy. This diversification beyond pure steel production could prove to be a decisive factor in the company's long-term valuation.
Siemens Energy: Record Quarter and Unabated Demand
Siemens Energy reported third-quarter results that are turning heads. Order intake climbed to EUR 17.9 billion, while revenue rose by 18.5% to EUR 11.45 billion. Profit before special items more than tripled to EUR 1.62 billion. The order backlog reached a new record high of EUR 162 billion. The wind power subsidiary Siemens Gamesa returned to profitability for the first time since 2022. This is a major breakthrough after the subsidiary had been a drag on the Group's balance sheet for years. Management expects margins for the current year to be at the upper end of the 10–12% range.
On July 14, the company announced its rebranding as Omterra. The name is a portmanteau of "Omega" and "Terra," intended to symbolize the convergence of energy infrastructure and renewables. This move saves the group EUR 300 million in annual licensing fees that were previously payable to Siemens AG. At the same time, the planned spin-off of the industrial division ran into trouble. The supervisory board called on CEO Christian Bruch to present alternatives by August 25 that would allow the division to remain within the company. This discussion is causing uncertainty among investors, which put pressure on the stock, even though the company's operational strength is undisputed.
At the same time, Siemens Energy is advancing its hydrogen strategy. At the end of July, the company signed a memorandum of understanding with the Algerian state-owned company Sonatrach for a hydrogen hub. Starting in the second half of 2027, a 100 MW electrolyser there is expected to produce approximately 10,000 metric tonnes of green hydrogen annually. In addition, the Hamburg Green Hydrogen Hub relies on technology from Siemens Energy. The medium-term goal is to adapt the gas turbine portfolio for hydrogen operation by 2030. Whether the structural changes and rebranding will provide sustained support for the share price remains to be seen in the coming months.
The steel transition remains a billion-dollar opportunity. thyssenkrupp is grappling with a mixed picture, featuring progress at TKMS and the steel division on the one hand and operational challenges on the other. Strategic Resources stands out thanks to its already approved mine, the planned pellet plant, and the critical raw materials vanadium and titanium. Siemens Energy is demonstrating its technological leadership with record figures and its hydrogen initiative, while the disagreement between the Executive Board and the Supervisory Board is causing short-term uncertainty. The course has been set for the green transformation, and the race for the best concepts and long-term partners has begun.
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