EU Safeguards And Import Curtailments Will Revitalize Silicon Metal Markets

Key Takeaways

• Trade protections and global supply cutbacks will boost local market share, stabilize pricing, and drive margin improvement as competitive pressures ease.
  
• Focus on high-value silicon specialties and growing demand from solar and EV markets will accelerate volume growth and expand revenue opportunities.
  
• Prolonged pricing pressure, global trade uncertainties, and reliance on protectionist measures threaten Ferroglobe's revenue, margins, and visibility, hampering growth prospects and long-term planning.

Catalysts

Produces and sells silicon metal, and silicon and manganese-based ferroalloys in the United States, Europe, and internationally.

• Imminent implementation of EU safeguard measures on silicon metal and alloys, combined with ongoing trade actions and tariffs in the U.S., is expected to sharply reduce low-priced imports from China and other regions. This will restore local market share, stabilize pricing, and drive a rebound in volumes and revenue from 2026 onward.
  
• Growing demand from the solar photovoltaic and EV industries, both of which rely heavily on high-purity silicon and silicon-based alloys, is likely to accelerate medium
• and long-term volume growth, expanding addressable markets and supporting top-line revenue expansion.
  
• Strategic shift toward specialty, high-value silicon applications (such as silicon-rich anodes for batteries), including increased investment in R&D and partnerships (e.g., Coreshell), positions the company to capture premium pricing and margin growth as new high-tech markets scale.
  
• Global production curtailments by Chinese, European, and Brazilian competitors in response to unsustainably low prices are expected to alleviate excess supply pressures, enabling a recovery in market prices and thus improving earnings and margins.
  
• Ongoing cost optimization, operational flexibility (e.g., switching furnaces to higher-margin products based on market conditions), and stronger fixed cost absorption due to volume recovery will structurally improve EBITDA margins and earnings resilience across cycles.

Ferroglobe Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Ferroglobe's revenue will grow by 9.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from -5.8% today to 11.6% in 3 years time.
• Analysts expect earnings to reach $224.9 million (and earnings per share of $0.63) by about August 2028, up from $-86.3 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 8.3x on those 2028 earnings, up from -9.5x today. This future PE is lower than the current PE for the US Metals and Mining industry at 21.4x.
• Analysts expect the number of shares outstanding to decline by 0.61% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.49%, as per the Simply Wall St company report.

Ferroglobe Future Earnings Per Share Growth

Risks

• Elevated uncertainty around global trade policies, persistent delays in finalizing EU safeguard measures, and complex tariff environments could continue to depress pricing, reduce demand visibility, and undermine revenue stability in key markets for multiple years.
  
• Aggressive low-priced silicon metal imports from China have driven European prices down 20–33% and slashed EU producers' market share from 40% to 15%, signaling persistent overcapacity and sustained pricing pressure that may erode net margins and future earnings.
  
• Heavy dependence on politically determined trade actions (safeguards, antidumping, and tariffs) to restore market equilibrium introduces significant execution risk; unfavorable or limited protections could leave Ferroglobe exposed to further volume and revenue declines.
  
• Ongoing production curtailments in Europe, China, and Brazil in response to unsustainably low prices point to an industry-wide squeeze, which, if prolonged, will pressure Ferroglobe's EBIT margins, reduce cash flow, and increase the difficulty of funding future growth projects or capital returns.
  
• Withdrawal of 2025 financial guidance amidst volatile pricing and limited demand visibility suggests ongoing uncertainty and weak long-term planning ability, increasing the risk of underperformance in revenue, EBITDA, and overall earnings trajectory.

Valuation

• The analysts have a consensus price target of $8.0 for Ferroglobe based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $224.9 million, and it would be trading on a PE ratio of 8.3x, assuming you use a discount rate of 8.5%.
  
• Given the current share price of $4.4, the analyst price target of $8.0 is 44.9% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.