Ferroglobe announces second quarter conference call

Ferroglobe scheduled its second-quarter call to discuss its financial results on Aug. 22. The quarter is expected to be its best for calendar 2018–the effects of the ITC rejection of GSM’s dumping duties won’t be fully seen until next year–and should be in line with the first quarter results. Usually, the market looks to the future not to the past but this might be different with GSM.

Lots of chatter on GSM (Ferroglobe) stock

With real volume behind the after hours price spike of Ferroglobe’s stock, analysts were trying to determine what’s behind it. The current betting is that the company is being sold. Among the likely buyers are a hedge fund, possibly even Bedrock Resources is controlled by Alan Kestenbaum, and/or Elkem. It is thought that Bluestar, the owner of Elkem, negotiated to buy GSM before GSM was merged with Ferroatlantica. Kestenbaum still has a significant financial position in Ferroglobe.

However, it’s all just speculation now.

New US legislation expands CFIUS review of foreign investments

It’s could get much harder for a Chinese company to invest in any US company. Under the National Defense Authorization Act (the Foreign Investment Risk Review Modernization Act” for fiscal 2019), the legislation “reformed” security review for foreign investments required under a CFIUS (the Committee on Foreign Investment in the United States) review.

The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) significantly expands CFIUS jurisdiction to include new types of “covered transactions” beyond those that could result in control of a US business by a foreign person. The legislation also provides CFIUS with additional time to review transactions, and requires mandatory short-form notifications of transactions in certain cases. Notably, the legislation includes Congressional findings that recognize the benefits of foreign investment in the United States, and includes a sense of Congress that “it should continue to be the policy of the United States to enthusiastically welcome and support foreign investment, consistent with the protection of national security.”

China’s Ministry of Finance commented: “China will comprehensively evaluate the bill and closely follow the impacts on Chinese enterprises during its implementation. At present, economic globalization is deepening and transnational investment is thriving. Both the Chinese and the US enterprises have strong willingness and potential in deepening investment cooperation. The two governments should conform to the wishes of enterprises and provide them with a favourable environment and stable expectations. The US should treat Chinese investors objectively and impartially and avoid making the national security review an obstacle to investment cooperation between the Chinese and the US enterprises.”

GSM (Ferroglobe) shares soar after yesterday’s close

The stock market is expecting something HUGE from Ferroglobe today. The company’s stock closed yesterday at $6.83 per share but immediately starting moving up, reaching $8.30 per share in the aftermarket. Today, pretrading is at $8.10 on NASDAQ.

Official Canadian government notice on safeguarding steel

The Government of Canada continues to protect Canada’s steel industry and stand up for Canadian workers, by taking further steps to prevent diversion of foreign steel products into Canada.

Recognizing the harm that diversion into Canada may cause to Canadian steel producers and workers, Finance Minister Bill Morneau today launched a public consultation on possible safeguard action on imports of the following steel products:

  • Steel plate
  • Concrete reinforcing bar
  • Energy tubular products
  • Hot-rolled sheet
  • Pre-painted steel
  • Stainless steel wire
  • Wire rod

Safeguards are trade measures imposed under international trade rules in exceptional circumstances to respond to import surges that may harm Canadian producers and workers. The Government will continue to work with stakeholders to determine if additional products may be considered for safeguard action, and is committed to applying additional safeguards where circumstances warrant their application, in accordance with Canada’s international trade obligations.

Comments regarding possible safeguard action can be submitted to the Department of Finance Canada at fin.simaconsult-lmsiconsult.fin@canada.cauntil August 29, 2018.

Minister Morneau made the announcement in Hamilton, Ontario, prior to a meeting with local business leaders. The business roundtable, hosted by ArcelorMittal Dofasco, is part of a series of meetings the Finance Minister is holding across the country to help inform the Government’s responses to immediate challenges and to support ongoing efforts to grow the economy over the longer term.

Momentive finds out the curse of good results

Momentive’s positive second-quarter results is expected to have an effect on KCC’s possible takeover of the silicones manufacturer. Some think the much better results will encourage the takeover while others think it could raise the price high enough to make the deal unattractive. Also Apollo might turn around and decided to keep it now.

Another bad hair day for Ferroglobe

Ferroglobe’s recent announcement that it “successfully” conducted a trial with its UMG for solar applications didn’t impress the market. While the stock price rose marginally above $7 yesterday, it fell back to $6.83 per share today; the daily high was $7.05 and the low was $6.75.

Analysts are wondering when Ferroglobe will announce its second-quarter results since they are expected to be the high point for 2018—spot silicon prices didn’t fall until the start of the third quarter.

Also, the company has a new CFO and it would be his first trial by fire.

Ferrochrome a downer for Ferbasa

Ferbasa produced 43,549 mt of ferrochrome, both low- and high carbon, in the second quarter of 2018 vs. 43,806 mt in the first quarter of 2018, a drop of 0.6%, while in the first half of 2018, production was 87,355 mt vs. 91,225 mt in the same period, a decline of 4.2%.

Ferrosilicon production was 22,363 mt in the second quarter of 2018 and 22,806 mt in the first quarter, a drop of 1.9%. Production in the first half was 45,169 mt vs. 29,294 mt in the same 2017 period.

Capacity utilization was 76% in the second quarter of 2018, down from 76.8% in the first quarter of 2018.

Sales of all ferroalloys were 51,356 in the first quarter of 2018 mt vs. second quarter production of 65,912 mt, or a surplus of 14,556 mt.

Sales of ferrochrome were 30,735 mt domestically and 1,647 mt for export for a total of 32,382 mt vs. production of 43,549 mt or a surplus of 11,167 mt.

In the first half of 2018, ferrochrome sales were 70,036 mt internally and 4,918 mt for export for a total of 74,954 mt vs. production of 87,355 mt for a surplus of 23,568 mt.

Sales of ferrosilicon were 5,261 mt domestically and 13,713 mt for export for a total of 18,974 mt in the first quarter of 2018. Production was 22,633 mt for a surplus of 3,659 mt.

In the first half of 2018, ferrosilicon sales were 10,830 mt domestically and 34,967 mt for export for a total of 49,456 mt. Production was 45,169 mt for a deficit of 4,287 mt.

SA chrome chrome sold in China at below 80¢

Sitting on a huge stockpile of uncommitted charge chrome and with all signs pointing down, a MAJOR South African charge chrome producer sold around 80,000 mt at 78-79¢ per lb this week to large Chinese stainless mills, which lower than its discounted benchmark price. The price, however, is competitive with the mills’ buying price with domestic ferrochrome smelters.

The hypocrisy of the spread between its European and US prices and its willingness to sell so cheaply in China is on display.

Meanwhile, UG2 prices have fallen to around $150 per mt.

Finally, internal prices for Chinese low-carbon ferrochrome (0.10% C) have fallen to below $1.50 this week, while European prices for 0.10% C are around $1.79, c.i.f., duty unpaid.

ZCE’s January 2019 contract taking most of the ferroalloy action

Most of the activity in the ZCE’s ferroalloy contracts has now migrated to the January 2019 contract from the September 2018 contract. Trading in the September ferrosilicon contract saw prices rising rmb 66 to rmb 7,042 per mt on the basis of 142,574 contracts changing hands while the January 2019 contract price rose rmb 126 to rmb 7,172 per mt on 165,188 contracts.

The September silicomanganese contract price fell by rmb 32 to rmb 8,896 per mt on 59,556 contracts while the January 2019 contract pride rose rmb 56 to rmb 8,628 on 61,212 contract.