Ryan’s Notes
April 25, 2014

Felman Production workers agree to terms 

Local media outlets in New Haven, West Virginia reported this past week that members of the United Steelworkers Local 5171 agreed to contract revisions at Felman Production's silicomanganese smelter. The plant previously ceased production in mid-2013.

On April 3, 2014, the Public Service Commission of West Virginia approved a special electric rate for Felman Production, which includes an annual maximum discount of $9-million while ensuring that Felman contributes at least $500,000 toward Appalachian Power Company's fixed costs.

The contract agreement among Local 5171 members signaled another step closer to a potential restart of the New Haven, WV silicomanganese smelter, although no date has been officially set. It was not known if a large number of workers had already been called back to work. 

According to expectations within the industry, it was believed that Felman Production likely has some necessary raw materials remaining on site from 2013, although its current sourcing needs were also unknown. Meanwhile, the power rate agreement with the Appalachian Power Company should be concluded in the coming days. 

The prospect of Felman restarting production has been widely discussed in the US silicomanganese market. Many market sources were still split as to what effects the additional units could have on the price of silicomanganese. Many commented, however, that Felman Production was well positioned and the volumes would not drive prices down, but rather Felman would pull back on imports. Others still declared doom and gloom. 

The price of silicomanganese held unchanged last week at 59.5-61C per lb, ex-warehouse. There were few sales, however, to push the market in either direction. There was a limited number of small inter-trade transactions taking place last week, but overall consumer activity was a bit subdued as many mills were believed to be well stocked for the time being.