Ferroglobe Idles French Plants Amid Weak Silicon and Ferro-Alloy Demand

Ferroglobe

Ferroglobe, a major producer of silicon and ferro-alloys, has idled its French operations for the fourth quarter of 2024, citing weak demand from the steel and aluminum industries. The decision, announced earlier than initially planned, reflects a challenging environment for shipment volumes across all product segments.

Production Curtailment and Market Challenges

The idling of Ferroglobe’s French plants aligns with the company’s strategy to maximize rebates on its energy agreements. However, CEO Marco Levi cautioned that depressed prices in Europe have elevated the company’s absorption costs, compressing profit margins.

In the third quarter, Ferroglobe shipped 56,910 tons of silicon metal, relatively flat compared to 57,031 tons in the same period last year. However, shipments declined 9.5% quarter-on-quarter, primarily due to weaker volumes in Europe, the Middle East, Africa, and the U.S., stemming from subdued demand in the automotive and construction sectors.

The company reported an average selling price of $3,401/t (€3,161/t), buoyed by stronger U.S. market premiums. Still, the lag between index prices and realized prices in other regions impacted profitability.

Future Investments and Trade Developments

Ferroglobe is advancing plans for a new brownfield silicon metal plant in the U.S. The facility, which could achieve a minimum capacity of 60,000 tons, is expected to be operational by early 2028. The project is in its permitting phase, which will take approximately 18 months before construction begins.

The company also sees a glimmer of hope in the U.S. ferro-silicon market. On November 1, the U.S. Department of Commerce implemented preliminary anti-dumping rates against imports from Brazil, Malaysia, and Kazakhstan. Ferroglobe is lobbying for similar trade defense measures in the EU to level the playing field against low-cost suppliers from Kazakhstan and Egypt.

Segment Highlights and Cost Efficiency

Silicon-based alloy shipments dropped 2% year-on-year to 45,489 tons, reflecting muted EU steel demand. Manganese alloy shipments rose 14.4% year-on-year to 64,495 tons but fell 21% quarter-on-quarter due to market slowdowns. Ferroglobe achieved a 3% reduction in raw material and energy consumption costs, driven by lower energy prices in France and Spain, and falling manganese ore costs. The company remains cautiously optimistic about a market recovery in the second half of 2025 as demand stabilizes across key industries.