October 1st, 2026 | 07:35 CEST
thyssenkrupp, Strategic Resources, Salzgitter – Steel Stocks That Could Benefit from the Industry's Transformation
Europe's steel industry is currently transforming. Since July 1, the EU has been protecting its steel market with a duty-free quota of 18.345 million metric tonnes and a 50% tariff on all imports exceeding that amount. Starting October 1, importers must also provide proof of where they smelted and cast their steel. This gives manufacturers breathing room to replace blast furnaces with direct reduction plants. However, these plants require high-grade iron ore of the appropriate quality. For those who view steel, raw materials, and restructuring as a unified whole, the new situation could work in their favour. We are therefore taking a closer look at thyssenkrupp, Strategic Resources and Salzgitter.
time to read: 4 minutes
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Author:
Armin Schulz
ISIN:
STRATEGIC RES INC. | CA86277X4093 | TSXV: SR , THYSSENKRUPP AG O.N. | DE0007500001 , SALZGITTER AG O.N. | DE0006202005
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: EUR 1.2 billion EBITDA target for the steel division
On September 28, thyssenkrupp Steel held its Capital Market Day. In the medium term, the division is aiming for an adjusted EBITDA of at least EUR 1.2 billion, with a margin of at least 11% and positive free cash flow. More than EUR 800 million is expected to come from internal measures. According to the company, the trade defence measures in effect since July cover more than 80% of the European flat steel market. This could give the Duisburg-based company some breathing room. In addition, the division continues to strive for independence, though the Essen-based parent company could retain a minority stake.
Developments in recent months support these goals. On August 13, thyssenkrupp presented its figures for the third quarter of fiscal year 2025/26. Revenue rose to EUR 8.8 billion, up from EUR 8.2 billion in the prior year. Adjusted EBIT came in at EUR 183 million, compared to EUR 155 million in the same quarter of the previous year. The restructuring and the APEX program appear to be giving the group a boost. The forecast for adjusted EBIT is now EUR 600 to 900 million, up from the previous range of EUR 500 to 900 million.
The restructuring continues in parallel. Of the planned 11,000 job cuts, the Group has already implemented about 4,000, and it has sold its stake in Hüttenwerke Krupp Mannesmann to Salzgitter. Hot Strip Mill 4 in Duisburg has resumed trial operations following fire damage, and the direct reduction plant for more climate-friendly steel is under construction. If the ramp-up is successful, the division could benefit particularly from tariff protection. Then Duisburg would no longer have to count every euro twice. Until then, the restructuring plan remains the framework. The journey is not yet over.
Strategic Resources: Pellet Plant for the Steel Transition in Québec
Replacing blast furnaces with direct reduction plants requires pellets of the appropriate quality. That is exactly what Strategic Resources is working on. A pellet plant with an annual capacity of 4 million metric tonnes is to be built at the deep-water port of Port Saguenay in Québec. A permit has already been granted for the BlackRock project, which currently covers 1.5 million metric tonnes per year. On May 26, Strategic Resources submitted all responses to the questions raised by the Québec Ministry of the Environment regarding the application for the larger facility. The company expects a positive decision in the coming months. A long-term lease agreement for the industrial site is in place.
Things are also moving forward in Finland. On June 29, the company announced that its magnetite concentrate from the Mustavaara project had been selected for FutSteel. The research project at the University of Oulu has a budget of EUR 17 million and will run from 2026 through 2029, in collaboration with, among others, the steel manufacturer SSAB. The material is being tested as part of a program for hydrogen-based iron production. Strategic Resources views this as confirmation of the material's quality. Additionally, on April 27, the company signed a memorandum of understanding with Tyfast Energy to evaluate battery-grade vanadium oxide derived from Canadian ore. In this way, the company is actively engaging in two future markets at once.
Key financing details are already in place. According to the company, construction costs for the pellet plant are estimated at USD 470 million, with two-thirds to be financed through debt and one-third through equity. Société Générale is on board as the lead bank, and Orion Mine Finance, an experienced investor, is among the shareholders. A benefit-sharing agreement is in place with the Cree Nation Government for the project's full duration, along with development agreements with three Innu communities. If the financing is finalized, construction could really gain momentum. Construction is then scheduled to begin in 2027.
Salzgitter: Aurubis and Cost-Cutting Program Turn Around Earnings
On August 11, Salzgitter reported its first-half 2026 results. EBITDA VX rose to EUR 459.0 million; in the same period last year, the figure was just EUR 116.8 million. Earnings per share came in at EUR 0.74, following a loss of EUR 1.68 in the first half of 2025. For the full fiscal year 2026, the Executive Board expects revenue of approximately EUR 10.0 billion, EBITDA VX of EUR 725 to 825 million, and profit before taxes VX of EUR 325 to 425 million.
The jump in profits was largely driven by the investment in Aurubis, which contributed EUR 193.0 million to earnings. Added to this were EUR 97 million in additional savings from the P28 efficiency program, as well as improved performance in the steel, trading, and technology segments. The cost-cutting program has given earnings a boost. While the Lower Saxony-based company remains heavily reliant on a single investment, its core operations have also improved compared to the previous year. The company itself notes that its forecasts are subject to uncertainty, partly due to geopolitical uncertainties.
Strategically, there have also been significant developments. Salzgitter has fully acquired Hüttenwerke Krupp Mannesmann in Duisburg, and according to the company, the acquisition is expected to contribute a mid-double-digit million amount to adjusted earnings. The Group has divested Klöckner DESMA's elastomer technology business. The Group's net financial debt stood at EUR 792 million as of June 30 and remained stable despite high investments in the SALCOS decarbonization project. If the restructuring of steel production is successful, Salzgitter could benefit from tariff protection, which limits imports from third countries.
The restructuring of the European steel industry is in full swing. thyssenkrupp has set clear medium-term goals for its steel division and is gaining ground operationally. Strategic Resources is working on the pellet plant in Port Saguenay and has found a research partner in FutSteel for its Finnish ore concentrate. Salzgitter is back in the black and has acquired a new site in Duisburg with Hüttenwerke Krupp Mannesmann. Each of the three companies contributes a building block to the steel industry's transformation, from raw materials to finished sheet metal, and the EU's tariff protection provides backing for the restructuring. All three are working toward the same goal.
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