Ferroglobe PLC (GSM) (Q3 2026) Earnings Call Highlights: Negative EBITDA, $100 Million ...

Negative Points

• Adjusted EBITDA turned negative at -$2 million in Q3 2026, down from positive $30 million in Q2, due to $18.5 million in extraordinary energy costs.

• Total shipments declined 3% quarter-over-quarter to 183,000 tons, with silicon metal and silicon-based alloys volumes down 6%.

• European ferrosilicon index is down 16% year-to-date, with excess inventory and elevated imports from Malaysia, Bhutan, Azerbaijan, India, and Angola weighing on prices.

• The company plans to close five plants and reduce its workforce by approximately 20%, incurring upfront costs of $40-60 million over 18 months.

• Q4 2026 is expected to remain challenging due to high energy costs and weak ferrosilicon market in Europe.

Q & A Highlights

Q: Are the five planned plant closures based on an assumption that European demand does not fully recover, or do they assume Venezuela backfills those tons? A: CEO Marco Levi explained that Ferroglobe has a broad asset footprint and is evaluating different combinations to raise capacity utilization to about 80% from roughly 60% today. The company forecasts improving demand, particularly in the U.S., over the next few years, which is why it plans to restart Venezuela and Selma in the United States. Beyond the already-disclosed South African plant decisions, management declined to disclose additional asset details until it engages other stakeholders and employee representatives.

Q: What is the status of the Venezuela permit, and what are the key issues in restarting operations there? A: CEO Marco Levi said the company expects to receive the OFAC license "anytime soon" and has already begun discussions in Venezuela to prepare for a restart. The main topic is reliable electricity supply, since Ferroglobe's electric furnaces can ramp up and down flexibly but require electricity reliability. The license is required to close any kind of negotiation.

Q: How do you expect critical materials shipments to ramp from Q3 to Q4, and how many other materials might be involved? A: CEO Marco Levi said the company is producing ferromolybdenum and running production of ferrovanadium and low-carbon ferrochromium, and may also run trials on ferroboron. Industrial-scale validation is still needed for the latter three products, so it is premature to discuss volumes. The objective for the quarter and into 2027 is to validate production capabilities first, then plan for market introduction.

Q: Could you provide more color on the EU potentially making anti-dumping duties on Chinese silicon metal retroactive? A: CEO Marco Levi noted that Ferroglobe had pushed hard on this "never-ending saga," recalling that safeguards were not applied to silicon metal, which hurt results. The company has changed its approach to an anti-dumping review against China, with the interim review officially started on September 1 and the EU announcing monitoring/registration of imports on October 23. Registration prevents stockpiling of Chinese material before new measures are decided and allows the Commission to potentially apply duties retroactively. He called it a good result but said "we are not where we want to be."

Q: What drove the sharp quarter-over-quarter decline in adjusted EBITDA to negative $2 million? A: CFO Beatriz Garcia-Cos Muntanola said adjusted EBITDA fell from positive $13 million in Q2 (which included a $5 million litigation benefit in Spain) to negative $2 million, as higher energy costs reduced EBITDA by nearly $19 million. Excluding these items, adjusted EBITDA would have been about $16 million. CEO Marco Levi added that the decline was mainly due to extraordinary energy costs, primarily in Spain, tied to the Middle East conflict, and to a lesser degree regulatory pricing in ferrosilicon.

Q: What are the details and expected benefits of the new cost reduction program? A: CEO Marco Levi said the program aims to consolidate operations into the most cost-competitive plants, lift capacity utilization to about 80% from less than 60% today, and close five plants globally with minimal impact on sales volumes or the ability to expand into critical materials. The company also plans to cut its corporate and operations workforce by roughly 20%. Once fully implemented, the program is expected to add approximately $100 million to annual EBITDA, plus or minus 15%, with upfront costs of $40 million to $60 million net of targeted working capital reductions over an 18-month period.

Q: How is the critical materials expansion progressing, including discussions with the U.S. government? A: CEO Marco Levi said Ferroglobe began commercial shipments of ferromolybdenum in Q3, well ahead of its year-end target, demonstrating it can produce critical ferroalloys at Monzon, Spain with minimal capital investment. Additional ferromolybdenum shipments and first commercial shipments of ferrovanadium and ferrochromium are expected in Q4. Discussions with the U.S. Department of War continue on schedule; the September 16 summary proposal covered magnesium, manganese and seven additional critical materials, with a final proposal expected in November and negotiations to begin in early 2027 and conclude before the end of Q1.

Q: How did the silicon metal segment perform in Q3, and what is the pricing outlook? A: CFO Beatriz Garcia-Cos Muntanola reported silicon metal revenue of $102 million, with volumes down 6% but average selling price up 3% to about $2,669 per ton from $2,592. Cost per ton rose 3% on higher energy and electrode prices in North America, and segment adjusted EBITDA was negative $2 million, slightly better than negative $3 million in Q2. CEO Marco Levi noted index prices rose 10% in the U.S. and 6% in Europe in Q3 on trade actions, with realized prices up 3% sequentially and volumes up 14% year-over-year, and cited increased customer interest in 2027 contract negotiations.

Q: How did the silicon-based alloys segment perform, and what could improve the European ferrosilicon market? A: CFO Beatriz Garcia-Cos Muntanola said silicon-based alloys revenue fell to $117 million on a 6% sequential volume decline to 59,000 tons, with realized prices essentially flat at $1,973 per ton and adjusted EBITDA at negative $2 million versus positive $15 million in Q2 (which included the $5 million litigation benefit). CEO Marco Levi attributed weak European volumes to a disciplined decision not to chase unprofitable volumes amid excess inventory and elevated imports from Malaysia, Bhutan, Azerbaijan, India and Angola, with the ferrosilicon index down 16% year-to-date. The European Commission's annual review of ferroalloy safeguards later this month could bring meaningful improvement in 2027.

Q: How did manganese-based alloys perform, and what is the outlook for steel demand? A: CFO Beatriz Garcia-Cos Muntanola said manganese-based alloys revenue rose to $114 million as volumes increased 1% to 86,000 tons and average selling price improved 5% to $1,630 per ton, though higher energy costs mainly in Spain drove cost per ton higher (energy accounted for 85% of the cost increase). Adjusted EBITDA was $11 million versus $13 million in Q2. CEO Marco Levi called it the most consistent segment, with a positive outlook supported by

For the complete transcript of the earnings call, please refer to the full earnings call transcript .