BERLIN, Feb. 14 (Xinhua) -- German steel giant Thyssenkrupp on Wednesday lowered its outlook for 2023/24, expecting to break even instead of achieving the previously assumed net profit in the low to mid three-digit million euro range.

In the first quarter (Q1), Thyssenkrupp recorded a net loss of 314 million euros (336 million U.S. dollars) due to impairment losses, which were "mainly attributable" to higher capital costs, said the company. In the same period a year earlier, the company posted a profit of 75 million euros.

Sales fell by almost 9 percent to 8.2 billion euros. Lower price levels in the steel and materials businesses, as well as falling sales of work and raw materials, had a "negative impact," according to the company.

The steel industry was "facing a very challenging environment," Thyssenkrupp said in a statement, adding that "the weak economy, renewed increases in raw material costs, high energy costs, and strong competition from non-European market participants are affecting Europe's steel producers."

According to industry data, steel production in Germany in 2023 fell to its lowest level since the financial crisis in 2009. After a slump of 3.9 percent year on year, only 35.4 million tons of steel were produced in the Europe's largest economy.

"The annual balance sheet for steel production in Germany clearly shows that the situation for the steel industry -- and the electric steel route in particular -- is very serious," said Kerstin Maria Rippel, managing director of the German Steel Association, last month.

At the same time, Germany's steel industry is trying to accelerate the pace of its green transformation. In this context, Thyssenkrupp emphasized that the company has "won important contracts" in the area of decarbonization at the World Climate Conference in Dubai in December 2023.

Together with the United Arab Emirates, Thyssenkrupp is to test the use of lower-CO2 fuels in cement production and build a biopolymer plant, as these have a "substantially lower carbon footprint" than synthetic polymers and are biodegradable.

The German government has also recognized the potential of green steel and is supporting several industrial players with large subsidies. Thyssenkrupp alone received a subsidy of 2 billion euros last year to save large amounts of CO2 during production through the use of hydrogen in the western German state of North Rhine-Westphalia.

"We are signaling that the steel industry in Germany has a future, thus securing jobs in the long term," said Minister for Economic Affairs and Climate Action Robert Habeck, stressing that Thyssenkrupp "is demonstrating that the consistent use of hydrogen can enable the decarbonization of the steel sector which is, after all, the biggest source of CO2 emissions in Germany." (1 euro = 1.07 U.S. dollar) Enditem

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