Elkem’s Silicon Product Sales Decline Amid Weak Demand

Elkem’s

Norwegian silicon and ferro-alloy producer Elkem reported an 11% year-on-year drop in silicon product sales during the third quarter of 2024, reflecting decreased demand in key markets such as silicone, aluminium, and steel. Sales for the quarter totaled 96,000 tons (t), down from 108,000t a year earlier and 13.5% lower than the previous quarter (April-June).

Falling Prices in Europe and Beyond

Silicon and ferro-silicon prices saw declines in the third quarter due to weak end-user demand, particularly in Europe.

• Ferro-silicon: Prices started the quarter at €1,430-1,500/t (ddp NWE) and fell 7% to €1,330-1,390/t, averaging €1,415/t for the period. Prices have continued to drop in October amid ongoing weak demand from steel markets.
• Silicon: Prices remained flat but appear to have reached a floor in Europe, aligning with stabilization in China that led to production cuts in southern regions. Despite this, further declines are possible, especially given a bleak outlook for January-March 2025.

Financial Performance and Divisional Trends

Elkem’s overall EBITDA for the third quarter doubled year-on-year to NOK1.2bn ($109.6mn), driven by improved performance in its silicones division. However, January-September EBITDA fell 5% year-on-year to NOK2.9bn.

• Silicone Sales: Increased significantly to 105,000t, up from 77,000t a year earlier.
• Carbon Solutions: Sales dipped slightly to 68,000t, down from 69,000t.

Carbon Capture Advancements

In October, Elkem secured NOK20mn in EU funding for its Sicalo carbon capture project, supplementing an earlier NOK31mn grant from Norway's environmental enterprise fund, Enova. This funding supports Elkem’s efforts to enhance sustainability in its operations.

Outlook

While silicones provided a strong counterbalance, weak silicon product and ferro-silicon demand continues to challenge Elkem’s performance. The company is focusing on innovation, including its carbon capture initiatives, to navigate challenging market conditions and prepare for future growth.