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Power costs prompt Ferbasa to halt plans for silicon plant

Keywords: Tags  Ferbasa, Cia de Ferro Ligas da Bahia, ferroalloys, ferrosilicon, silicon metal, Carolina Guerra

SÃO PAULO — Brazilian ferroalloys producer Cia. de Ferro Ligas da Bahia (Ferbasa) has halted plans to build a silicon metal plant in the country due to uncertainties about electricity costs.

"The project is currently in a holding pattern due to uncertainties in relation to electric energy (availability, regulation and price trends)," the Bahia-based company said. "The recent discovery of shale gas in the United States and the subsequent fall in energy prices is expected to worsen the viability of the project."

Ferbasa expects ferrosilicon prices to decline slightly in the third quarter as energy costs are falling in some producing countries, such as China.

"The market normally reports a slight drop in the third quarter," president Geraldo de Oliveira Lopes said. "The dollar valuation, however, could neutralize these effects in Brazil." The company’s revenues are in dollars and more than 85 percent of its costs are in Brazilian reais, so a devaluation of the Brazilian currency could positively affect the company’s profits.

The company reported revenue of 185.7 million reais in the first quarter of this year on shipments that fell 2 percent from a year earlier to 63,925 tonnes (, April 17).

A version of this article was first published by AMM sister publication Metal Bulletin.

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