Ferbasa Ferro-Alloy Production Rises as Prices Weigh on Earnings

Ferbasa

Ferbasa ferro-alloy production increased in the second quarter despite weaker prices and higher costs. Ferbasa ferro-alloy production reached 75,406t, up 2.5pc year on year. However, adjusted EBITDA dropped 32pc as electricity and chrome ore costs climbed.

FeSi and ferro-chrome output strengthen

Ferbasa ferro-alloy production was broad-based across product lines. Chromium alloys rose 2.1pc to 51,051t. Silicon alloys rose 3.4pc to 24,335t. High-purity ferro-silicon output surged 27pc and formed 45pc of silicon alloys. As a result, the mix favored higher-spec FeSi demanded by advanced steelmakers.

Sales improved, but margins compressed

Ferbasa lifted ferro-alloy sales 14pc quarter on quarter to 79,000t. Exports jumped 29pc, while domestic sales rose 1.1pc. Nevertheless, lower global ferro-alloy prices pressured revenue. Therefore, EBITDA fell to R$67.6mn, down 32pc year on year. Power inflation and chrome ore costs further tightened margins.

Trade policy adds risk to outlook

North American steel tariffs rose from 25pc to 50pc. That shift could curb Brazilian steel output and indirect demand for alloys. Meanwhile, an EU safeguard probe into ferro-silicon and manganese alloys could reshape import access. Consequently, contract pricing and regional allocation decisions remain critical for 2H.

The Metalnomist Commentary

Ferbasa’s near-term playbook is clear: prioritize high-purity FeSi, optimize furnace dispatch, and hedge power exposure. Watch tariff pass-through and EU safeguards, which will influence realized prices more than volumes. Cost discipline and product mix will determine whether output gains translate into cash flow.