Ferroglobe (NASDAQ:GSM) reported higher shipments, revenue, adjusted EBITDA and free cash flow in the second quarter of 2026, as increased silicon metal volumes and stronger fixed-cost absorption helped offset continued pricing pressure from imports.
Total shipments rose 7% sequentially to 188,000 tons, while revenue increased 9% from the prior quarter to $379 million. Adjusted EBITDA improved by $10 million to $13 million, and free cash flow improved by $37 million to $20 million, Chief Executive Officer Marco Levi said during the company’s earnings call.
Segment Performance and Cash Flow
Chief Financial Officer Beatriz García-Cos said adjusted EBITDA margin rose to 3.5% in the second quarter from 1% in the first quarter. Improved operational execution and higher fixed-cost absorption were the principal drivers of the increased profitability, she said. Second-quarter adjusted EBITDA also included a $5 million benefit from litigation in Spain.
- Silicon metal: Revenue rose 26% sequentially to $106 million on higher volumes, though average selling prices fell 6% to $2,592 per ton. The segment posted an adjusted EBITDA loss of $2.7 million, compared with a $2.3 million loss in the first quarter.
- Silicon-based alloys: Revenue increased 2% to $135 million as volumes rose 4% to 63,000 tons. Realized prices declined 1.5% to $1,986 per ton. Adjusted EBITDA increased to $15 million from $7 million in the prior quarter, aided by fixed-cost absorption and the litigation benefit.
- Manganese-based alloys: Revenue was unchanged at $108 million. Volumes were marginally lower, offset by a 2% rise in average selling price. Adjusted EBITDA increased to $30 million from $10 million in the first quarter, while margins rose to 12% from 9%.
Cash flow from operations totaled $37 million, compared with negative $6 million in the first quarter, supported by a $28 million working-capital release and improved operations. Capital expenditures increased by $6 million sequentially to $17 million, primarily due to a charcoal plant investment in Spain.
The company paid a quarterly dividend of $0.015 per share, or $2.8 million in aggregate, on June 29. Its next dividend of $0.015 per share is scheduled for Sept. 29 for shareholders of record as of Sept. 22. García-Cos said net debt and adjusted gross debt declined by $17 million and $20 million, respectively, during the quarter.
Looking to the second half, García-Cos said Ferroglobe expects to continue releasing working capital, estimating a further release of about $15 million. She said the company does not plan to resume its share repurchase program under current market conditions, though it continues to assess the decision.
Critical Materials Expansion
Levi outlined Ferroglobe’s strategy to expand beyond its core silicon and manganese-alloy businesses through production of critical materials using existing assets and metallurgical expertise. The company is evaluating opportunities in magnesium, antimony, silver, gallium, ferromolybdenum, ferrovanadium and ferrochromium.
Ferroglobe said it completed industrial-scale test production of ferromolybdenum at an existing furnace. Levi estimated North American demand for ferromolybdenum at approximately 8,000 tons annually, representing a market opportunity of more than $300 million per year at a cited market price of about $42,000 per ton.
The company also said it has demonstrated the ability to produce magnesium at its existing facilities. North American magnesium demand is approximately 60,000 tons annually, according to Levi, who cited a market price of roughly $7,500 per ton. He said a new U.S. magnesium facility with 20,000 tons of annual capacity would require investment of about $180 million to $200 million before government subsidies.
During the question-and-answer session, Levi said Ferroglobe has been in discussions with the U.S. Department of Energy for two years and the Department of War since February. The company has submitted an initial proposal and expects its next step to involve a more detailed proposal, including the support it would seek for projects identified as priorities by the departments.
Levi said the company expects to have a clearer view of its competitive cost position in ferroalloy production by year-end, following additional industrial testing. Ferroglobe also expects to conduct tests of other critical alloys before the end of the year and is targeting initial commercial activity in critical materials before year-end.
Trade Measures and Market Conditions
Management said trade conditions remain a major determinant of the company’s core-market outlook. Silicon metal shipments reached 41,000 tons during the quarter, including a 70% increase in Europe and an 80% increase in North America. U.S. and European silicon metal indexes increased 5% and 6%, respectively, during the quarter.
However, Levi said silicon metal volumes remained below levels seen in 2024 and earlier periods, while imports from China and Angola continued to pressure European prices. Ferroglobe expects a European Commission investigation into alleged dumping of silicon metal by China and Angola to be announced soon, according to management.
For silicon ferroalloys, European shipments increased 31%, while North American volumes declined 11% amid higher imports from Angola, Azerbaijan and Bhutan. U.S. and European silicon-ferroalloy indexes fell 2% and 6%, respectively, during the quarter. Levi said the company expects European conditions to remain difficult until additional trade measures are implemented.
Manganese remained the company’s most consistent segment, management said. Second-quarter manganese alloy index prices increased approximately 10%, and have risen about 25% since safeguards were implemented in November. Ferroglobe expects stable manganese volumes for the remainder of 2026, with potential support from enhanced steel safeguards that took effect July 1.
Venezuela and Footprint Optimization
Ferroglobe is also evaluating a restart of its four low-cost furnaces in Venezuela, which have combined annual capacity of 120,000 tons and can produce silicon metal, ferrosilicon and manganese alloys. Levi said the company applied in late June for a U.S. permit to begin communications with the Venezuelan government and anticipates a decision before the end of the third quarter.
The potential Venezuela restart is intended to provide lower-cost supply for the U.S. market while enabling U.S. furnaces to focus more on higher-value critical materials, management said. Ferroglobe is also reviewing its broader asset footprint, seeking to concentrate production at its most competitive sites and potentially repurpose other assets for critical-material production or alternative industrial uses.
About Ferroglobe (NASDAQ:GSM)
Ferroglobe PLC is a leading producer of specialty metals and alloys, serving a diverse range of industrial customers worldwide. The company’s core operations focus on the manufacture of silicon metal, silicon-based alloys, manganese-based alloys and rare earth alloys, which are essential inputs for the aluminum, steel, chemical and electronics industries. Ferroglobe’s product portfolio includes high-purity silicon, ferrosilicon, silicon manganese, manganese alloys and various recarburizers used to enhance metal strength, durability and conductivity.
With production facilities located across North America, Europe, South America and Africa, Ferroglobe maintains a global footprint that allows it to supply customers on multiple continents.
