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Globe maintenance work will keep furnace shut for two months

Keywords: Tags  Globe Specialty Metals, Jeff Bradley, silicon, Becancour, Alloy, outages, Suzy Waite

NEW YORK — Globe Specialty Metals Inc., in the midst of performing maintenance work at its Bécancour, Quebec, and Alloy, W.Va., operations, expects one of the Alloy furnaces will be shut for at least two months.

"In this current quarter, we are taking each of the three furnaces in Bécancour down for a week each for planned maintenance. We also have two planned furnace maintenance outages at our Alloy plant. One is complete and lasted about 17 days. The other will take more work and we’ll take the furnace offline starting Dec. 1 through the end of January," chief executive officer Jeff Bradley told analysts during a conference call Wednesday following the release of the company’s financial data.

The outage at the second Alloy furnace could even "leak into February," he said, but noted that once complete, Globe’s silicon production next year will be higher than this year’s output.

Orders for next year are well underway, Bradley said. "Orders are coming in at a healthy pace. To date, we have commitments for more than half our expected 2013 silicon metal production and negotiations are continuing for the balance."

Globe said that silicon prices, which fell to $1.25 to $1.30 per pound in mid-July from $1.43 to $1.45 at the beginning of the year, have bottomed out, and it expects an uptick in upcoming months.

"We have said we believe pricing has hit the bottom," Bradley said. "We believe that if we get through next year, business (will) improve. We’re seeing good demand out of the auto business, which is aluminum. We’re seeing good demand out of the silicones business that’s tied to a lot of markets, (such as) the construction market, which is improving. So overall the markets are improving."

Globe posted a net loss of $5.7 million for its fiscal first quarter ended Sept. 30 in contrast to net income of $20.7 million in the same period last year despite a 14.8-percent increase in sales to $200.7 million on silicon shipments that jumped 29 percent to 70,030 tonnes from 54,285 tonnes.

Results were negatively impacted by a $16.1-million after-tax charge for the modification of a stock option plan to allow settlement of options of cash; $400,000 of after-tax transaction-related and due diligence expenses; and $800,000 in tax adjustments to normalize the tax rate.

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