Ferroglobe NASDAQ: GSM is pursuing expansion into critical materials, cost reductions and potential production growth in Venezuela as it navigates weak market conditions in Europe and competitive pressure from imports, Vice President of Investor Relations Alex Rotonen said during a company presentation.
Rotonen described the company as a global producer of silicon metal, silicon-based alloys and manganese alloys, with each product category representing roughly one-third of its business. Ferroglobe operates more than 50 furnaces across five continents and generated $1.3 billion in sales last year, he said. Approximately 85% of sales occur in the United States and Europe.
The company’s silicon-based and manganese alloys primarily serve steel production, while silicon metal is used across solar panels, aluminum, automotive applications, construction, consumer products, semiconductors and energy-related markets. Rotonen said silicon metal could also play a larger role in EV batteries, where it may be used in anodes as an alternative to graphite.
Critical-materials expansion
Ferroglobe is seeking to leverage its processing experience and furnace network to enter or expand production of critical materials. Rotonen said the company has held several discussions with the U.S. Department of Defense, which has shown interest in materials including magnesium, antimony, silver, gallium, ferromolybdenum, ferrochromium and ferrovanadium.
The company has successfully produced magnesium and ferromolybdenum, according to Rotonen. A U.S. magnesium plant would require an estimated $180 million to $200 million of capital expenditure and could take several years to begin operating. He said China controls 95% of the magnesium market and that there is no Western magnesium production.
Ferroglobe could potentially make several ferro-alloy critical materials at its existing furnaces with little or no capital spending, Rotonen said. Potential silver and gallium recycling projects in Europe could require about €20 million each, while a potential antimony project in South Africa depends on securing a competitive energy contract.
Rotonen said the company is in the final stages of submitting requests to the Department of Defense for assistance, guarantees and other support. He characterized magnesium as a particularly promising opportunity because of its strategic importance and lack of Western supply.
Trade actions and European market pressure
Ferroglobe’s core operations have faced a difficult environment, particularly in Europe. Rotonen said imports of silicon metal into Europe from China and Angola doubled from 2024 to 2025, while silicon-metal prices fell about 40%.
The company has pursued trade protections in Europe, including safeguards on ferrosilicon and manganese alloys. Those safeguards establish a quota equal to 75% of the prior three-year average, with a 25% penalty for imports above that amount, he said.
However, Rotonen said low-priced silicon metal has been substituted for ferrosilicon in some applications because silicon metal became unusually inexpensive. Ferroglobe estimates that substitution has affected at least 60,000 metric tons and potentially as much as 100,000 metric tons of the ferrosilicon market, equivalent to about 15% to 20% of that market.
The company is pushing the European Commission for safeguards or anti-dumping measures involving silicon metal imported from China and Angola. Rotonen said European steel production appears to be improving following steel safeguards that took effect July 1, although he noted that European steel markets had been weak for roughly 18 months amid challenges in the region’s automotive industry and a slower economy.
Cost actions, energy and Venezuela
Rotonen said Ferroglobe is conducting a portfolio optimization effort and preparing aggressive cost actions, though he did not provide specific savings targets. The review includes plant profitability, overhead and the potential use of artificial intelligence for certain tasks.
He said Venezuela could provide substantial production flexibility if Ferroglobe receives U.S. government authorization to engage with the Venezuelan government and negotiate an energy arrangement. The company owns a Venezuelan facility with four furnaces and 120,000 tons of capacity that has been under care and maintenance since 2017.
Ferroglobe believes it could restart two to three furnaces, potentially with spending in the single-digit millions of dollars, though Rotonen said the company would need to avoid oversupplying the market. He cited Venezuela’s proximity to hydroelectric power, quartz and other inputs, as well as potentially lower labor and energy costs.
Energy costs remain central to the company’s operations. Rotonen said Ferroglobe has a 10-year energy contract in France that took effect Jan. 1 and also has a hydroelectric power contract in Norway. The company is not currently producing in South Africa because it lacks a viable energy contract there.
Balance sheet and Coreshell investment
Rotonen said Ferroglobe reduced debt from more than $500 million at the end of 2021 to $131 million, while holding approximately $93 million in cash. Net debt was about $37 million to $38 million, he said.
The company reported $28 million in EBITDA last year, a level Rotonen said was insufficient to cover capital expenditures and was not sustainable. He said Ferroglobe intends to increase its dividend amount over time, while noting that dividend yield will depend on the stock price.
Ferroglobe has also invested $17 million in Coreshell, giving it about a 10% stake in the battery-anode company, and has a multiyear supply agreement with it. Rotonen said Coreshell is shipping to robotics and drone customers and is in discussions with automotive original equipment manufacturers, though he does not expect a material revenue contribution in 2026 or 2027.
About Ferroglobe (NASDAQ:GSM)
Ferroglobe PLC is a leading producer of specialty metals and alloys, serving a diverse range of industrial customers worldwide. The company's core operations focus on the manufacture of silicon metal, silicon-based alloys, manganese-based alloys and rare earth alloys, which are essential inputs for the aluminum, steel, chemical and electronics industries. Ferroglobe's product portfolio includes high-purity silicon, ferrosilicon, silicon manganese, manganese alloys and various recarburizers used to enhance metal strength, durability and conductivity.
With production facilities located across North America, Europe, South America and Africa, Ferroglobe maintains a global footprint that allows it to supply customers on multiple continents.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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