Ryan’s Notes
July 3, 2014

Felman pens power agreement, restarts

Felman Production reported this past week that it reached a power agreement with Appalachian Power Company and was thus resuming plant operations immediately. The company will begin production with two of three of its furnaces, with ramp up taking place throughout the month of July.

Felman’s Chief Executive Officer Mordechai “Motti” Korf said, “I am very pleased that we have been able to successfully restart operations. Our special rate provides us with the necessary flexibility to continue operating during periods of weak commodity prices, while ensuring that we pay more than 100 percent of variable costs over the life of the contract. I want to acknowledge everyone in the local community that provided their positive feedback and support during the plant shutdown, and I want to thank the West Virginia Public Service Commission, APCo, and the United Steelworkers Local Union 5171 for their efforts to strengthen Felman’s long term viability. We look forward to continuing to provide our customers with high-quality product at competitive market prices.”

Prices for silicomanganese in the US remained down, at 57- 61₵ per lb, with the majority of new deals being concluded at 57-59₵ per lb, ex-warehouse, likely indicating a constant trend for the near term. While some sources indicated that Felman would exercise a disciplined pricing strategy with the restart of its plant, this would likely not have an effect on others within the trade. With the restart currently underway, some traders could begin to offer stocks at more competitive prices to reduce exposure to the market during the summer months and during Felman’s ramp up.