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Demand to drive need for silicon metal: Globe

Keywords: Tags  Globe Specialty Metals, Jeff Bradley, earnings report, silicon metal, new capacity, Mississippi Silicon, Rima Industrial, John Correnti FerroAtlantica


CHICAGO — Globe Specialty Metals Inc. is not concerned about potential new silicon metal capacity in North America, citing increased demand and low energy costs, according to the company’s top executive.

Recently announced projects also might not impact the market for years—assuming they are ever built, Jeff Bradley, chief executive officer of the silicon metal and silicon-based alloys producer, said during an earnings conference call with analysts Feb. 7.

"Markets are improving all over the world," he said. "So as time goes you will see more capacity come up. ... As demand continues to grow, there is more capacity that will be needed."

That ramped-up demand comes from growth in silicon metal-consuming markets, such as automotive aluminum, solar energy and silicones, Bradley said. Asian demand is firm, European demand is rebounding and Canadian demand has expanded by 25,000 tonnes due to a successful trade petition that New York-based Globe filed against Chinese silicon metal (amm.com, Nov. 19), he said.

Given high power prices in Europe and elsewhere that are forecast to increase, Bradley said it makes sense to locate production capacity in North America, where energy is less expensive. "When you look around the world, one of the best places to manufacture is the United States," he said.

In the United States, Mississippi Silicon—a partnership between the Vicintin family, which owns Bocaiúva, Brazil-based Rima Industrial SA, and Clean Tech I LLC, a U.S. investment group whose members include steel industry veteran John Correnti—plans to spend $200 million to build a 36,000-tonne-per-year silicon metal plant in Burnsville, Miss. (amm.com, Jan. 2). In Canada, Grupo FerroAtlántica SA has announced plans to spend $375 million to build a silicon metal plant in Quebec (amm.com, Feb. 4).

But Bradley questioned whether the facility in Canada would be built, brushing it aside as "just an announcement" and noting that permits have yet to be issued. "Once they get the permits, it’s going to probably take three to four years to get a plant up and running if they actually do."

Bradley also dismissed concerns about overcapacity in China, arguing that Beijing is "finally" pushing to shut down polluting and inefficient silicon metal plants. He estimated the silicon metal market at about 2 million tonnes per year, with Chinese exports accounting for about 400,000 to 500,000 tonnes.

While Bradley downplayed the threat of excess Chinese silicon metal in the global market, he also stressed that Chinese-made silicon metal is locked out of U.S., Canadian and European markets because of dumping cases, and a pending investigation in Australia could see Chinese silicon metal pushed out of that market as well.


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