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Demand, prices boost Globe optimism

Keywords: Tags  Globe Specialty Metals, Jeff Bradley, Joseph Ragan, silicon outlook, silicon prices, trade petition, construction, solar automotive

CHICAGO — Globe Specialty Metals Inc. may have recorded a fiscal-year loss, but the company is optimistic about a better year ahead on expectations of strengthening demand, pricing and operational stability.

"As we look forward to the first quarter of fiscal 2014, we expect continued improved performance," chief executive officer Jeff Bradley said in an earnings conference call with analysts Aug. 21.

End-market demand for the New York-based silicon producer’s products continue to grow at a faster clip than gross domestic product gains, he said, thanks to strength in the consumer economy as well as the homebuilding, solar and automotive sectors, with automotive in particular gobbling up large amounts of silicon metal for aluminum alloys.

"We’re also starting to see a more positive trend in the spot price of silicon metal," he said, due in part to interim import duties being imposed July 22 on shipments of Chinese silicon into Canada (, July 23).

Bradley declined to further discuss Globe’s outlook for pricing and tonnages because he said the company was "getting close to pricing season."

The Canadian trade case also had negative consequences, Globe chief financial officer Joseph Ragan said, pointing out that Canada saw an "upsurge" in imports of Chinese silicon ahead of the interim duties being put in place.

Bradley said that Globe is seeing improvements in its silica fumes business, notching higher prices in the export and spot markets thanks to demand from the oilfield sector as well as continued strength in the refractory and concrete markets in North America (, Feb. 8). Silica fume is a byproduct of the smelting process used in concrete.

Other tailwinds include a better performance at Globe’s Alden Resources LLC, a specialty metallurgical coal mining company in Kentucky, which is "back online and running at historic rates," Bradley said in response to questions about how the unit was performing after production curtailments.

And while the lockout at Globe’s silicon metal facilities in Bécancour, Quebec, continues (, July 8), the company is talking with the union representing workers at the plant, Bradley said. "We ... look forward to a good outcome eventually." He declined to provide details on negotiations.

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