Platts
May 7, 2014
By Bob Matyi, with Anthony Poole in New York

 USW says Felman plans June restart for West Virginia silicomanganese plant

Felman Production has told the United Steelworkers union it hopes to start production in early June at its idled 105,000 mt/year silicomanganese plant in New Haven, West Virginia, a union official said on May 7.   

However, the company told Platts on May 5 that a decision to restart the plant was being delayed until ongoing regulatory challenges to a favorable power-rate relief ruling Felman received on April 3 from the West Virginia Public Service Commission have been resolved.

Roy Martin, vice president of USW Local 5171 at the plant, told Platts the Florida-based company was preparing to restart production for the first time since last July.

"There has been good progression to prepare to restart Felman," he said. "Several laid-off employees have been called back to work to prepare equipment to start up. The union is being told by the company managers that Felman hopes to start production in early June."

The WV PSC is reviewing requests for reconsideration of the decision filed by the agency's Consumer Advocate Division and the West Virginia Energy Users Group. They oppose the commission's approval of an electricity rate discount of up to $9 million/year for Felman. Felman initially sought $9.5 million/year for 10 years.      

According to Martin, the company "hasn't commented on what is going on with the PSC ruling in the past few weeks, but they did tell us there would be appeals to the ruling."

In mid-April, Local 5171 ratified a revised labor agreement with Felman after having initially rejected the tentative deal. Although most terms of the updated accord have not been disclosed publicly, the union said the favorable vote extended the existing collective bargaining agreement until June 2017.

Felman could not be reached for additional comment.   

The US domestic market for silicomanganese is about 400,000 mt/year, meaning the New Haven plant's production had about 25% of the market. The plant was understood to be operating at, or close to, full capacity when production was suspended last July, because of low silicomanganese prices.

Felman, along with its parent company, Georgian American Alloys, part of Ukraine's Privat Group, was estimated by market participants to have a US market share of just over 50% before Felman stopped producing, supplying the US with imported silicomanganese from Georgia and with Felman's domestic production. 

Several steel mills, where Felman had been an incumbent supplier, did not cover their 2014 annual silicomanganese requirements on long-term contracts this year and used the spot market, or bought on a quarterly basis, instead. Some mills are understood to have since entered into long-term supply agreements for the balance of the year.        

Silicomanganese prices have risen to 59.50-62.00 cents/lb from 49.50-51.00 cents at the time Felman stopped producing, according to Platts' assessments.