Construction of Ferrosolar’s UMG silicon lant in Spain is on hold

Ferroglobe, one of the world’s leading producers of silicon metal and silicon-based alloys, has announced that construction of the upgraded metallurgical-grade (UMG) silicon factory of its subsidiary Silicio Ferrosolar in Spain “is on standby until end market conditions improve.”

In the conference call on Ferroglobe’s fourth quarter and full year 2018 results held on February 26, CEO Pedro Larrea Paguaga said: “We are temporarily suspending other projects, such as our solar-grade silicon pilot plant in Puertollano, and several R&D initiatives until we will bring down that [capital expenditure] further.” In August 2018 the company announced that its UMG silicon plant with an annual capacity of 1,400 metric tons would be operational by the end of 2018.

Ferroglobe now said in a press release that the 2018 financial results “may be subsequently adjusted for items including impairment of long-lived assets such as the assets associated with our solar-grade silicon project.”

That may be a hint that suspending construction could be more than just temporary as the sustained trend away from multicrystalline solar cells creates a strong headwind for lower-purity UMG silicon.