Kyle Mowery

Asked about the potential impact of European quotas on production costs, the current effects of US ferrosilicon rulings on imports and pricing, and the required rate of return for the proposed new US facility.

Answer

Executives explained that European quotas would increase capacity utilization and improve cost absorption. In the US, Russian ferrosilicon imports have dropped, and while inventories initially impacted prices, they are now depleting, and Ferroglobe is signing new contracts. For the new US facility, they expect a return significantly higher than their cost of capital, driven by superior furnace technology.

Kyle Mowery questioned the potential impact of increased utilization on European production costs if proposed quotas are finalized. He also asked if the effects of U.S. ferrosilicon rulings are visible yet and what rate of return the company would require to proceed with its potential new U.S. facility.

Answer

CEO Marco Levi stated that while the exact EU measures are unknown, any safeguards would likely involve quotas, which would increase demand for European producers, improve capacity utilization, and lead to better cost absorption. Regarding U.S. ferrosilicon, he noted that while Russian imports are down, inventories have impacted pricing, but he sees signs of depletion and has signed new customer contracts. For the new U.S. facility, Levi expects a return significantly higher than the company's cost of capital.