Ryan’s Notes

July 8, 2013

Felman shutdown has little impact 

Felman Production has stopped operations at its New Haven WV, silicomanganese smelter for at least three months (July through September) due to poor market conditions. During this period, the smelter's in-house slag processing unit will remain operational. 

Felman did not declare force majeure on contract shipments, and it has not been a major player in the spot market for some time. Its low-cost Georgian silicomanganese plant will contin­ue to operate; many of Felman’s largest US customers take the Georgian high-manganese content (min. 72% Mn but typical­ly 73-74% Mn) high P (max. 0.35% P) material. 

Georgia is the major supplier to the US silicomanganese mar­ket, supplying 54,947.5 mt of the 129,056.8 total US imports in the first four months of 2013. Total April silicomanganese imports were 31,880.9 mt, of which Georgia supplied 17,265.9 mt. In 2012, Georgia supplied 113,535 mt of silicomanganese to the US of the total 353,999 mt the US imported. 

As a result, the impact of the shutdown is expected to be minimal. 

However, the temporary closure could influence the upcoming decision on whether to lift the penalty duty on imports of silicomanganese from Venezuela. An ITC hear­ing is scheduled for July 18. 

On May 31, 2013, Felman temporarily closed one of its furnaces and reduced its workforce. Since the economic and market conditions continue to deteriorate, the decision to immediately cease operations at all of its three furnaces was difficult, but inevitable, according to a Felman execu­tive. Within the next two months, Felman plans to reevaluate market conditions to determine whether operations will resume earlier or if the plant will remain closed for an additional period of time.  

While no layoffs are expected during the first two months of closure in compliance with laws and ongoing maintenance activities, the company anticipates working with the appropriate state and union officials to facilitate unemployment and other related benefits for those employees impacted by the decision to keep the plant closed for a longer period of time.