Silicon and ferro-silicon prices in the US are likely to surge because of steep tariffs on imports announced this week, while prices in Europe might fall as countries hit by high tariffs redirect material to the EU.
The tariffs announced by President Donald Trump on 2 April exempted a number of minor metals and ferro-alloys, listed in Annex II of the executive order, but ferro-silicon and silicon metal of less than 99.99pc purity were not among the exemptions. The US steel industry is a major consumer of imported silicon products.
The tariffs are the second major US trade announcement on ferro-silicon in two weeks after the International Trade Administration (ITA) determined anti-dumping duty rates against ferro-silicon imports from Brazil, Malaysia and Kazakhstan on 25 March. A final decision on anti-dumping duties is due on 12 May, and it remains to be seen how the new tariffs will impact the ITA's decision.
Several major silicon and ferro-silicon producing countries are now subject to Trump's adjusted reciprocal tariffs, above the 10pc applied to all imports. Vietnam now has one of the highest tariff burdens at 46pc, Kazakhstan is subject to 27pc and Malaysia to 24pc.
The countries have been major suppliers of silicon products to the US. In 2024, the US imported 27,084t of ferro-silicon from Malaysia, 13,119t from Vietnam and 10,262t from Kazakhstan.
Silicon and ferro-silicon producer Ferroglobe, which has operations in the US, Canada and Europe, and which petitioned for the anti-dumping duties before the ITA, says it is too early to predict the full impact of the tariffs. "As a vertically integrated local producer in both the US and the EU, we believe that Ferroglobe will benefit from a more level playing field in both markets," the producer said.
But sellers of heavily-tariffed material have taken immediate steps to reduce their exposure. "I just cancelled a lot of vessels from Vietnam because you cannot pay a 46pc tariff," a trader said on Thursday.
Countries with lower tariffs stand to benefit if prices surge. A producer in one such country told Argus he expects his company's margins and market share in the US to increase.
Brazil is subject to only a 10pc tariff, making Brazilian producers now among the most affordable for the US market. The US imported 59,971t of silicon metal and 33,182t of ferro-silicon from Brazil in 2024, comprising 40pc and 21pc of total silicon and ferro-silicon imports, respectively.
Iceland is also subject to the base 10pc tariff, although for silicon metal there is a pre-existing anti-dumping duty on PCC BakkiSilicon at 47.54pc, and 37.83pc on all other sales from Iceland. Norway's tariff was set at 16pc, making it more competitive than the EU, which is subject to 20pc. The US imported 9pc of its silicon metal from Norway in 2024.
Norwegian silicon and ferro-silicon producer Elkem, which exports silicon-based products to the US from Canada, Paraguay, Iceland and Norway, told Argus the company will be increasing prices on all products going to the US. "Given that the US is a net importer of our products, we expect prices in the US to increase by more than the raised tariffs on Elkem's products," the company said.
US exports might be redirected to EU
The European ferro-silicon market has been rattled by concerns of dumping in Europe.
Many expect more affordable material from Kazakhstan, Vietnam and Malaysia to flood the European market because of trade diversions from the US.
A European producer expects large quantities of ferro-silicon to flood the market. "I am very afraid that Kazakhstan especially can ship material to Europe and will take the risk," he said.
The EU has said it will take steps to prevent dumping of cheap goods in Europe. But with the European steel industry under pressure from the tariffs, the EU might hesitate to take measures that could increase costs for the steel sector.
EU safeguard investigation could face delays
The European ferro-silicon and silicon industries have already struggled to compete with affordable imports from third-country competitors with lower production costs.
On 19 December, the European Commission announced a safeguard investigation on imports of silicon, ferro-silicon and manganese alloys.
Many market participants expected a decision on trade protection measures in April. Some traders have held on to stock in the hope of prices increasing after the announcement.
But now producers, traders and consumers told Argus this week that they expect any decision on safeguarding the ferro-alloy industry to be delayed until tariff negotiations have been concluded. Some planned meetings on the measures have been cancelled, the producer heard, as priorities have shifted.
A trader with stocks in Europe told Argus that if he hears confirmation that the safeguard announcement will be delayed, he and other traders will look to sell material. "Prices are only inflamed because of the safeguarding," the trader said. "If it's a six-month delay, prices might stay firm, but if it's a year, we can't wait."
