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

Felman parent switches Georgia plant to ferromanganese after US silicomanganese restart

With Felman Production resuming silicomanganese output at its West Virginia plant, its Miami-based parent, Georgian American Alloys, is shifting three furnaces at its facility in Georgia in eastern Europe to ferromanganese from silicomanganese starting in August, the company said on July 7.

As a result of the switch, Georgian Manganese is expected to produce 3,500 mt/month of ferromanganese and will reduce silicomanganese production by about 3,000 mt/month, the company said.

Felman restarted one of three silicomanganese furnaces at its New Haven, West Virginia, plant on July 2, the first step toward resuming production at the facility, which was idled at the end of June last year.

"With Felman Production slated to resume production of silicomanganese in the coming weeks, the strategic shift at Georgian Manganese's Zestafoni Ferroalloy Plant serves to appropriately balance the amount of silicomanganese GAA brings to market," CEO Mordechai Korf said in a statement. "One of the many benefits of GAA's organizational structure is that we are able to make the necessary changes across our businesses to serve our customers," he added.

A Felman spokesman said in an interview the company planned to be producing silicomanganese on two furnaces at its 105,000 mt/year West Virginia plant by the end of July.

Roy Martin, vice president of United Steelworkers Local 5171 at New Haven, said the production switch at the Georgia plant bodes well for Felman. "This will only help Felman's business and the domestic market," Martin said. The domestic market for silicomanganese is about 400,000 mt/year, meaning the New Haven plant represents about 25% of the market.

There has been much speculation in US ferroalloys markets as to whether current silicomanganese price levels can be sustained in the second half of the year with the resumption of Felman Production's US output. On the supply side, several sources said that both GAA and Felman's silicomanganese production was entirely sold on long-term contracts and the restart of the plant may not have much impact on spot pricing, especially if it resulted in imports from Georgia falling in the second half of the year.

On the consumption side, consumers have argued that they did not believe US silicomanganese prices could be sustained in the second half of the year, because the US market was trading at a premium to the rest of the world and most US consumers had covered their second-half year requirements on long-term contracts.