European silicon market showing signs of recovery

• Friday, July 24, 2020
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[Ferro-Alloys.com] Europe's silicon market is starting to show signs of recovery this week, with increased buying interest in the south of the continent and further support coming from Chinese price gains, but caution persists and the road back to pre-lockdown price levels is likely to be slow.

 

Respite for European producers

 

Europe's two major silicon producers will likely welcome signs of recovery, keen for some respite from the depressed conditions that have hampered the market since late 2019, compounded by the challenges presented by the Covid-19 pandemic.

 

Norway's Elkem achieved a robust performance in the second quarter, given how tough conditions have been. Sales of silicon materials were down by just 1,000t year-on-year at 61,000t — a strong performance considering lockdowns were in place across much of Europe. Some of these sales will have been made to other regions.

 

Elkem noted that demand from the chemical and automotive sectors was down in the second quarter, particularly toward the latter end, but demand from the solar industry held up well. It expects its capacity utilisation rate to be around 90pc in the third quarter.

 

Spain's Ferroglobe is yet to release its April-June figures, but previously warned of the upcoming demand impact of Covid-19, as lockdowns were imposed in many of its operating regions. US credit ratings agency Fitch downgraded Ferroglobe's rating on 23 June to reflect higher risk to creditors, an indication of how difficult they expect the next few months to be for the company.

 

"We expect 2020 to be the second consecutive year of mid- to high-single digit decline in silicon metal demand, both in the US and the EU. Demand for aluminium alloys (from automotive end-markets) remains under pressure while the Covid-19 pandemic also erodes demand for chemicals and solar-grade silicon," Fitch said.

 

Source: Argus media

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