Elkem silicones division sale to refocus capital on core silicon and carbon

Elkem

The Elkem silicones division sale marks a major portfolio shift for the Norwegian materials producer. Elkem has entered an exclusive process with a major industrial buyer to complete the Elkem silicones division sale by the first half of 2026. As a result, the Elkem silicones division sale will free capital for its silicon products and carbon solutions businesses.

Elkem launched a strategic review of its silicones business in January. The review considered multiple options, but the company concluded that a clean exit best aligns with its long term strategy. The buyer remains unnamed, but Elkem describes it as a significant player in the global chemicals industry. Therefore, silicones will move into a more specialised chemicals platform, while Elkem doubles down on upstream silicon materials.

Importantly, Elkem is selling a business that is currently improving, not struggling. The silicones division generated NKr3.87bn in income in April–June 2025. Ebitda rose to NKr247mn from NKr45mn a year earlier. This rebound reflects higher volumes, lower raw material costs and better operational efficiency. However, Elkem still sees stronger returns by concentrating resources in fewer, more focused segments.

Elkem silicones division sale reshapes its growth and investment profile

The Elkem silicones division sale will streamline Elkem into two core divisions. These are silicon products and carbon solutions. Silicon products cover metallurgical silicon, ferrosilicon and advanced silicon-based materials. Carbon solutions supply electrodes and carbon products into metals and energy markets. Together, they define Elkem’s identity as a technology driven, upstream materials company.

By exiting silicones, Elkem reduces exposure to more fragmented specialty chemicals markets. It also gains flexibility to invest in decarbonisation, energy efficiency and higher value silicon applications. Meanwhile, the buyer can integrate the silicones division into a broader chemicals portfolio with different synergies. As a result, both parties may unlock value that Elkem could not fully realise alone.

The timing also reflects changing capital discipline in European materials groups. Investors increasingly favour focused balance sheets and clear growth themes. A successful Elkem silicones division sale could therefore improve Elkem’s valuation metrics and visibility. It may also release funds for selective mergers, technology investments or capacity expansions within core segments.

The Metalnomist Commentary

Elkem’s move underlines a broader trend: diversified materials groups are pruning downstream units to concentrate on advantaged upstream platforms. Selling a recovering silicones business suggests confidence in the earnings power of silicon and carbon, especially under energy transition demand. Market participants should watch sale proceeds, reinvestment plans and any follow up deals as signals of how far Elkem will push this refocus.

Elkem Restructuring Targets Cost Control as Silicon Market Weakens

Elkem

Elkem restructuring is becoming a major response to weaker market conditions after the Norwegian metals group completed the sale of its silicones division. The company will now operate through three divisions: Elkem Silicon, Elkem Foundry Alloys, and Elkem Carbon. The move marks a sharper focus on core materials businesses as silicon and ferro-silicon markets remain under pressure.

Elkem restructuring also comes with a significant cost-cutting programme. The company plans to reduce its total workforce by 10% and improve working capital and capital expenditure by Nkr1.3 billion, or about $135 million. Salary and operating cost reductions are expected to generate annual savings of Nkr600 million, while investment will be capped at Nkr1 billion this year.

Elkem restructuring reflects the pressure now facing energy-intensive metals producers in Europe. High inventories, weak demand visibility, and elevated energy costs have already forced the company to temporarily reduce silicon and ferro-silicon production at its Salten and Rana plants in Norway.

Silicon and Ferro-Silicon Markets Pressure Elkem’s Core Operations

Elkem’s latest restructuring follows a sharp earnings decline in its continuing operations. Excluding the divested silicones division, the company recorded fourth-quarter 2025 earnings of Nkr485 million, down by almost 40% from a year earlier. That result shows how quickly weaker demand can affect upstream and intermediate materials businesses.

The company’s silicon and ferro-silicon operations are especially exposed to industrial cycles. These products serve aluminium alloys, foundries, chemicals, steelmaking, and other manufacturing value chains. When customer demand slows or inventories rise, producers face direct pressure on operating rates and margins.

Elkem’s temporary production reductions in Norway underline this challenge. Silicon and ferro-silicon production depends heavily on reliable and competitive power costs. In a weak market, high energy costs can quickly turn capacity utilization into a margin risk rather than a volume advantage.

Cost Cuts Aim to Preserve Competitiveness Until Demand Recovers

Elkem’s cost-cutting programme is designed to preserve financial flexibility until market conditions improve. Chief executive Helge Aasen said the measures should position the company to deliver long-term value for customers, employees, and stakeholders once the market recovers.

However, the outlook remains uncertain. Elkem said the conflict in the Middle East has increased macroeconomic uncertainty and affected value chains for many of its customers. The company now expects the first half of 2026 to be weaker than previously expected, with limited visibility.

The restructuring also signals a broader trend across European metals and materials companies. Producers are narrowing portfolios, reducing fixed costs, and protecting cash as demand from downstream industries becomes harder to forecast. For Elkem, the sale of silicones and the renewed focus on silicon, foundry alloys, and carbon products create a leaner structure, but the company still depends on a recovery in industrial demand.

The Metalnomist Commentary

Elkem’s restructuring shows how energy-intensive metals producers are moving from expansion logic to survival discipline. The key question is whether cost cuts can protect competitiveness long enough for silicon and ferro-silicon demand to recover.

Elkem Silicon Products Weaken as Low Ferro-Silicon Prices Hit Earnings

Elkem Silicon

Elkem silicon products came under pressure in 2025 as weak demand and low prices for silicon and ferro-silicon reduced group earnings despite higher sales volumes. The Norwegian metals group reported EBITDA of Nkr3.44 billion, or about $360 million, down 18% from the previous year.

Elkem silicon products remained a central part of the business, contributing 42% of group sales. Sales volumes in the division rose 3% to 434,000 tonnes, but weaker pricing outweighed the benefit of higher volumes.

The division’s EBITDA fell 47% to Nkr1.52 billion. This shows how exposed silicon producers remain to oversupply, soft industrial demand, and trade measures that are reshaping global alloy flows.

Silicon and Carbon Divisions Reflect Metallurgical Market Weakness

Elkem silicon products faced difficult conditions across silicon metal, ferro-silicon, and foundry alloy markets. The company described the environment as marked by weak demand and low sales prices, reflecting a prolonged downturn in metallurgical value chains.

The carbon solutions division also weakened. The unit, which supplies specialty carbon products to metallurgical smelting and primary aluminium producers, recorded sales of 261,000 tonnes, down 5% from 2024.

Carbon solutions EBITDA declined 20% to Nkr908 million. Elkem linked the decline to difficult conditions in metallurgical industries, where customers cut production and reduced demand for carbon inputs.

Silicones Recovery Contrasts With Trade Pressure on Alloys

Elkem’s silicones division performed strongly despite weakness in its metallurgical units. Silicones sales volumes rose 14% to 443,000 tonnes, while EBITDA more than doubled to Nkr1.10 billion after expansion projects in China and France were completed.

The stronger silicones result comes as Elkem reshapes its portfolio. The company launched a strategic review of the division last year and recently agreed to sell a majority stake to China-based Bluestar.

Trade fragmentation remains a major issue for Elkem. The company cited EU safeguard measures on ferro-silicon, ferro-manganese, and silico-manganese imports from countries including Norway and Iceland, along with US countervailing duties on Norwegian silicon metal. These measures add complexity to sales channels, pricing, and long-term competitiveness.

The Metalnomist Commentary

Elkem’s results show that higher volumes cannot protect silicon producers when prices and trade flows turn against them. The company’s restructuring and silicones sale suggest a sharper focus on surviving a fragmented, low-margin alloy market.

Elkem’s Ferro-Silicon Production Set to Drop Amid Weak 4Q Sales

Elkem

Elkem reduces production after weak sales and muted demand for silicon and ferro-silicon products.

Norwegian silicon and ferro-alloy producer Elkem is set to cut back its ferro-silicon production in the first quarter of 2025. This decision follows a significant drop in silicon product sales during the fourth quarter of 2024. Elkem’s operations have been under pressure due to weaker demand and lower prices, particularly in the ferro-silicon and silicon markets.

Production Challenges and Maintenance Disruptions

The reduction in production is largely driven by scheduled maintenance at Elkem’s Norwegian facilities and power constraints at its Iceland-based Hvalfjordur plant. These issues have already led to a 30% decrease in production at the Hvalfjordur plant since January. The plant, which has a production capacity of 120,000 tonnes per year, will likely see continued production constraints in the first quarter.

Decline in Sales and Weak Market Conditions

Elkem’s silicon products division, which includes silicon metal and ferro-silicon, saw a 19% decrease in sales during the fourth quarter of 2024, reaching 98,000 tonnes. This decline was a reflection of weak market conditions, with demand for silicon and ferro-silicon remaining subdued. Furthermore, prices in China hit new lows due to oversupply and a downturn in the polysilicon market. Although prices in Europe remained more stable, they were still relatively low throughout the quarter.

Financial Performance and Strategic Adjustments

Despite the challenges in its silicon products division, Elkem saw a significant improvement in its overall earnings before interest, taxes, depreciation, and amortisation (EBITDA), which totaled 1.16 billion kroner ($102.85 million) for Q4 2024. This represents a marked increase from the previous year’s 632 million kroner, driven by operational improvements and a successful capex reduction program. However, the EBITDA for the silicon products division fell by 24%, marking a 13.3% decrease in full-year 2024 EBITDA compared to 2023.

In light of these challenges, Elkem is considering divesting its silicones division. This move would allow the company to focus on expanding its silicon products and carbon solutions divisions, aiming for more robust growth in these areas.

Conclusion

Elkem’s decision to reduce ferro-silicon production is a direct response to weak demand and operational issues in early 2025. The company’s strategic adjustments, including a potential divestment of its silicones division, aim to position it for future growth in the silicon and carbon solutions markets, which could be key to sustaining long-term profitability.

Elkem low-CO2 slag recycling accelerates circular materials

Elkem

Elkem low-CO2 slag recycling gained momentum with a NOK 32.8mn grant. The Elkem low-CO2 slag recycling program will convert FeSi slag and secondary silicon into cement alternatives. As a result, Elkem low-CO2 slag recycling targets deep cuts in construction material emissions.

Turning FeSi slag into cement alternatives

Elkem will develop cement alternatives from ferro-silicon slag at its EAF sites. The company targets a CO2 footprint under one-third of standard cement. Testing will run at the Kristiansand facilities acquired in 2024. The materials will serve construction and automotive supply chains. Innovation Norway’s Environmental Technology Scheme funds the project.

Scaling circularity with secondary silicon

Elkem plans recycling rates above 50pc in the new products. The flows will include secondary silicon and FeSi slag fines. Therefore, the project can reduce waste while cutting clinker demand. Lower clinker intensity drives Scope 3 reductions for builders and OEMs. Partners can validate performance during pilot production in southern Norway.

Circular products for resilient supply chains

The initiative aligns with Europe’s low-carbon materials push. It also diversifies binder options for precast and ready-mix users. Meanwhile, cement substitution can ease price volatility tied to carbon costs. Elkem’s silicon expertise and grid access support competitive abatement costs.

The Metalnomist Commentary

Elkem’s move tackles two pain points: slag disposal and cement emissions. Watch durability data, SCM inclusion rates, and scale-up timelines. If pilots confirm strength and workability, demand from EU projects could ramp quickly.

Elkem Launches Review of Silicones Division to Navigate Market Challenges

Elkem

Elkem, a Norwegian ferro-alloy and silicon producer, has initiated a review of its silicones division in response to overcapacities in China and weak consumer markets. The company’s goal is to streamline operations and reallocate capital to its silicon products and carbon solutions divisions. As a fully integrated player in the silicones industry, Elkem handles everything from silicon metal production to downstream silicone specialties. However, the company faces a tough operating environment due to global oversupply, particularly in China.

Elkem's Investment in Expansion and Recovery in 2024

To address these challenges, Elkem has invested heavily in expanding its production capabilities. In 2024, the company allocated 4.4 billion Norwegian kroner ($390 million) to enhance its Chinese and French operations, boosting overall capacity by 140,000 tons per year. The improvements in China were completed in May, while the French project was scheduled for completion by the end of the year. Despite the market difficulties, Elkem’s silicones division reported a significant recovery, with earnings before interest, taxes, depreciation, and amortization (EBITDA) of NKr145 million for the January-September period in 2024. This marked a major improvement from a loss of NKr672 million in 2023, driven by operational efficiencies and the ramp-up of new capacity.

Strategic Review with Expert Advice

To ensure the company’s continued success in this challenging environment, Elkem has appointed Norwegian bank ABG Sundal Collier to assist with the review. While the timeline for the review is not yet clear, the company is scheduled to report its fourth-quarter results on February 12. This review underscores Elkem’s commitment to maintaining competitiveness in the silicones sector and ensuring capital is deployed effectively across its divisions.

Elkem 2Q loss widens as tariffs and weak solar demand hit silicon

Elkem

Elkem 2Q loss underscores pricing pressure and softer end markets. The silicon producer reported a 228mn kroner loss. Sales volumes rose 2% to 113,000 tonnes, but prices lagged. Therefore, Elkem 2Q loss reflects mix and margin erosion.

Prices, demand, and volumes

Lower silicon metal prices drove the Elkem 2Q loss despite higher shipments. Solar sector demand weakened from already reduced levels. However, ferrosilicon and silicon metal volumes held steady. As a result, revenue fell faster than output.

Management cited weaker demand and persistent tariff pressure. Meanwhile, customers delayed purchases amid cost inflation and uncertainty. Therefore, contract resets may arrive slower than expected. Elkem 2Q loss highlights limited pricing power this quarter.

Trade actions and market access

US tariffs restricted export options and redirected tons into Europe. Consequently, regional premiums compressed under additional supply. Additionally, US trade investigations raised compliance costs. These headwinds compounded the Elkem 2Q loss.

Norwegian exports now face prolonged policy and legal risk. However, targeted mix upgrades could buffer margins. As a result, near-term focus shifts to costs and cash. The company must preserve share while defending price.

The Metalnomist Commentary

Elkem’s challenge is cyclical price pain amplified by trade friction. The quickest fixes are cost discipline and product mix upgrades. Watch US cases, solar demand recovery, and quarterly pricing resets.

Elkem 1Q Earnings 2025 Rise on Silicones and Carbon Sales, Despite Silicon Division Weakness

Elkem

Strong Silicones and Carbon Solutions Offset Declines in Silicon Products

Elkem 1Q earnings 2025 rose by 25% year-on-year, driven by strong performance in the company’s silicones and carbon solutions divisions. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled NKr898 million ($86 million), despite headwinds in global trade and energy markets. However, the silicon products division—which includes ferro-silicon and silicon metal—recorded a sharp decline due to production interruptions and weak demand.

Silicon Division Faces Headwinds from Tariffs and Market Disruptions

The silicon division’s EBITDA fell 28% to NKr489 million, as power curtailments in Iceland, maintenance in Norway, and uncertainty around U.S. tariffs weighed on performance. Sales volumes dropped 9% year-on-year to 106,000t. Elkem noted that tariffs announced on 2 April by the U.S. impacted silicon and ferro-silicon, despite exemptions for many other ferro-alloys. The firm warned that indirect effects of trade disputes—like weakened global demand—could continue to erode margins.

Silicones Division Up for Sale After Strong Performance

Elkem plans to divest its silicones division following a 2024 strategic review. Despite being listed as "discontinued operations," the division’s Q1 2025 sales surged 34% to 106,000t, with strength in the Asia-Pacific region. Operating income rose 16% to NKr3.9 billion, even as prices softened. Meanwhile, carbon solutions held steady with 64,000t in volume and a 4% EBITDA gain, supported by stronger sales in Brazil and specialty carbon products.

The Metalnomist Commentary

The Elkem 1Q earnings 2025 reveal a business navigating complex trade pressures while optimizing its portfolio. Strategic geographic diversification and a timely silicones divestment may help Elkem weather potential volatility in its core silicon segment.

Elkem delves into silicon production augmented by carbon capture and reuse.

Elkem

The Norwegian silicon producer Elkem is exploring an innovative approach to silicon manufacturing that integrates carbon capture and reuse, aiming to scale this method industrially by the early 2030s. The Norwegian Ministry of Climate and Environment-owned organization, Enova SF, has allocated 31 million Norwegian kroner (approximately $2.9 million) to support a medium-scale pilot project in Kristiansand, Norway.

Traditionally, silicon metal is produced by reducing quartz or quartzite with a carbon source such as coke, coal, or wood chips in an electric arc furnace, where silica reacts with carbon to produce molten silicon metal and carbon monoxide gas. The carbon monoxide can further react with oxygen to form carbon dioxide (CO2).

Under Elkem's innovative Sicalo concept, the carbon emitted during this process will be captured and recycled back into the silicon production cycle as a reducing agent, nearly eliminating all direct CO2 emissions. Despite the standard process's high energy demand—requiring 10-14 MWh per ton of silicon metal—Elkem utilizes over 80% emissions-free electricity and manages to reclaim some energy.

Elkem is nearing completion of the first research phase, which includes laboratory tests on various subprocesses. The Research Council of Norway had earlier contributed NKr16 million to this phase of the project.

Earlier in January, Elkem announced the completion of its initial carbon capture and storage pilot at its Rana facility in Norway, which achieved capture rates of up to 95%.

Elkem’s Silicon Product Sales Decline Amid Weak Demand

Elkem’s

Norwegian silicon and ferro-alloy producer Elkem reported an 11% year-on-year drop in silicon product sales during the third quarter of 2024, reflecting decreased demand in key markets such as silicone, aluminium, and steel. Sales for the quarter totaled 96,000 tons (t), down from 108,000t a year earlier and 13.5% lower than the previous quarter (April-June).

Falling Prices in Europe and Beyond

Silicon and ferro-silicon prices saw declines in the third quarter due to weak end-user demand, particularly in Europe.

• Ferro-silicon: Prices started the quarter at €1,430-1,500/t (ddp NWE) and fell 7% to €1,330-1,390/t, averaging €1,415/t for the period. Prices have continued to drop in October amid ongoing weak demand from steel markets.
• Silicon: Prices remained flat but appear to have reached a floor in Europe, aligning with stabilization in China that led to production cuts in southern regions. Despite this, further declines are possible, especially given a bleak outlook for January-March 2025.

Financial Performance and Divisional Trends

Elkem’s overall EBITDA for the third quarter doubled year-on-year to NOK1.2bn ($109.6mn), driven by improved performance in its silicones division. However, January-September EBITDA fell 5% year-on-year to NOK2.9bn.

• Silicone Sales: Increased significantly to 105,000t, up from 77,000t a year earlier.
• Carbon Solutions: Sales dipped slightly to 68,000t, down from 69,000t.

Carbon Capture Advancements

In October, Elkem secured NOK20mn in EU funding for its Sicalo carbon capture project, supplementing an earlier NOK31mn grant from Norway's environmental enterprise fund, Enova. This funding supports Elkem’s efforts to enhance sustainability in its operations.

Outlook

While silicones provided a strong counterbalance, weak silicon product and ferro-silicon demand continues to challenge Elkem’s performance. The company is focusing on innovation, including its carbon capture initiatives, to navigate challenging market conditions and prepare for future growth.