Steel industry.  Salzgitter.  "Very difficult second half"World News 

Steel industry. Salzgitter. “Very difficult second half”

steel industry
Salzgitter. “Very difficult second half”

The employee cleans the blast furnace of “Salzgitter AG” steel plant. Photo by Hauke-Christian Dittrich / dpa

© dpa-infocom GmbH:

Steel production is as energy-intensive as raw materials. High demand, for example from car և machine builders or the construction industry, nevertheless brought Salzgitter AG lavish revenues.

The recent rise in steel prices has brought high profits for the Salzgitter Group. According to the management, however, the further course of the year may become more uncertain.

“Markets are now declining again in contrast to commodities,” CEO Gunnar Grobler told a general meeting on Thursday. “We are preparing for the very difficult second half of 2022.”

The dynamic development of raw material and energy costs can be mitigated to some extent through hedging transactions. As a result of the war in Ukraine, supplies of coal and ore to Salzgitter were hardly damaged. “Of course, there are indirect effects, such as electricity and gas prices or uncertain sales markets,” said Grobler. “These effects are noticeable, but we as a company can prepare for them.”

Aiming to become independent of Russian raw materials

The manager stressed that Salzgitter, as the second largest German steel producer, wants to help achieve greater independence from Russian raw materials. “One way to do that is through LNG terminals. “We are already producing the pipes through which the gas will flow,” said Grobler, who joined the Wilhelmshaven liquefied natural gas pipeline.

Hopefully, your own power supply will not be compromised. “If we have to assume a sharp cessation of gas supplies (from Russia), it will affect Salzgitter AG. However, it is difficult to predict how much this is.

Overall, the Group expects further sales and profit growth in 2022. The management estimates that the revenue could reach 11 billion euros. In 2021, 9.8 billion euros were acquired, with a net profit of 586 million euros. Shareholders must receive 75 cents per share, which will be the highest payment since 2008.

From coke to hydrogen

Salzgitter wants to gradually turn its steel production from coke coal to hydrogen. In addition to pig iron, instead of carbon dioxide, water vapor is produced, which can significantly improve the climate balance. The first plant from the summer should replace the usual explosive furnace. Necessary hydrogen must be obtained from water or ammonia using green electricity for a successful CO2 reduction. To this end, Salzgitter has teamed up with the Danish wind energy group Ørsted. “We can provide two types of energy – green electricity – green hydrogen,” said Grobler.

In addition, one wants to remain an independent company. There have been several rumors of a possible merger with Thyssenkrupp, a German industry leader. Construction raw material entrepreneur Gunter Papenburg, whose voting rights reach the threshold of a quarter, announced in May: However, it may “influence the appointment of other administrative, governing or oversight bodies if necessary.”


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