Thyssenkrupp’s Two-Speed Recovery: Green Ammonia Wins as Steel Bleeds Red

The Essen-based industrial conglomerate is living a tale of two extremes. While its plant-engineering arm secures a landmark export deal in Southeast Asia, the steel division continues to drag the entire group deeper into the red. With a net loss of €334 million in the first fiscal quarter and a stock that has shed roughly nine percent since January, Thyssenkrupp faces a pivotal test of its ability to execute a radical transformation.

A Fresh Breeze from Brunei

Thyssenkrupp Uhde, the group’s engineering subsidiary, has clinched a contract with Brunei Fertilizer Industries to expand ammonia export capacity. The project involves constructing a new cooling tank and a modern ship-loading facility, designed to enable large-scale shipments into global markets. Ammonia is gaining traction as a carrier for green hydrogen, positioning this contract as a strategic win for the group’s long-term decarbonisation ambitions.

Yet the hydrogen story is not all smooth sailing. Thyssenkrupp Nucera, the electrolyser unit, issued a profit warning in March after a US customer cancelled a pilot plant agreement. Additional cost overruns in the green hydrogen segment compounded the pain, though a new electrolyser order from Spanish energy group Moeve has offered some respite for the current fiscal year.

Steel’s Deepening Wounds

The core problem remains the steel division. Cheap Asian imports have flooded the European Union — volumes have tripled since 2022 — crushing margins and forcing drastic measures. After months of short-time work, Thyssenkrupp will shutter its Isbergues site in France for several months this summer. The financial toll is stark: first-quarter revenue slid to €7.2 billion, while adjusted operating profit improved slightly to €211 million, but restructuring costs in steel drove the overall net loss.

Management is pursuing an exit from the HKM steel joint venture, with a sale of its stake to Salzgitter AG targeted for June. Meanwhile, negotiations with Indian rival Jindal Steel remain tense. A breakdown of those talks would throw the entire future of the steel business into doubt, analysts warn.

Should investors sell immediately? Or is it worth buying Thyssenkrupp?

A Hidden Ace in the Elevator Shaft

Outside the struggling core operations, Thyssenkrupp still holds a roughly 16 percent stake in TK Elevator. The majority owners are exploring an initial public offering, with five major banks already preparing the listing. At a potential valuation of up to €25 billion for the entire elevator business, Thyssenkrupp’s stake could be worth around €4 billion. A direct sale is also on the table, though antitrust concerns over market concentration could complicate that route.

Brussels to the Rescue?

Relief for the beleaguered steel division may come from European regulators. The EU Parliament is set to vote by the end of June on doubling existing steel tariffs, with a decision on additional safeguard duties expected on July 1. That timeline places significant weight on the half-year results due May 12, which will provide hard data on the group’s current earnings trajectory.

Technical and Market Signals

Investor sentiment remains cautious. Thyssenkrupp shares slipped below the 200-day moving average recently, trading around €8.79 to €8.90, establishing a medium-term downtrend. The relative strength index hovers near 31, technically close to oversold territory. Barclays continues to recommend underweighting the stock.

The next few months will demand deft navigation from management: completing the costly steel restructuring, delivering on the new plant-engineering orders profitably, and closing the HKM sale. If the elevator IPO materialises, it could provide a much-needed cash injection. But for now, the group’s transformation remains a race between green shoots in engineering and the heavy anchor of steel.