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Hi all,
Posting my first DD in this subreddit. I bought Ferroglobe YEARS ago but now I think it's a good time to share it amidst a possible turnaround in 2026 and beyond.
**What is Ferroglobe?** Ferroglobe ($GSM) is the largest Western producer of **Silicon Metal** and ferro-alloys. If you don't know silicon metal, it is an important ingredient in the production of a few things:
* **Chemicals:** Making silicones for medical, cosmetic, and industrial use.
* **Aluminum:** Making engine blocks and wheels stronger.
* **Solar:** The raw material for photovoltaic cells.
* **Steel:** Essential for hardening and deoxidizing steel beams.
They own their own high-purity quartz mines, making them one of the only **fully vertically integrated** players in the West.
# Why has the stock performed poorly in the past couple years?
If you look at the chart, $GSM had been beat down. After a record 2021/2022 - mostly because of a surge in post-COVID spending - they experienced huge margin compression afterward:
1. **Cheap foreign imports:** Low-priced imports from China, Malaysia and other countries flooded the EU and US, crushing market prices and slashing revenue.
2. **Energy Crisis in the EU:** Due to the war in Ukraine, energy prices in the EU spiked. Being an energy-intensive business, high power prices drove up costs and forced them to "idle" (shut down) plants in France and Spain for months at a time.
3. **Cyclical Trough:** High interest rates slowed down global construction and auto sales, reducing demand for their core alloys.
Basically, Ferroglobe experienced ALL of the risks of being a commodities miner/producer. As a price-taker, they are at the whims of market prices in the global markets, combined that with being in a cyclical industry, it's clear why the stock had been beaten up so much.
# The 2026 Turnaround
I think now $GSM is in a good spot for a turnaround for a few reasons (which has recently been reflected in the stock's performance since Nov 2024). Management seems to have worked hard to address many of the core issues they previously faced.
**1. Trade Protections** Ferroglobe has successfully petitioned both the US and EU for unfair trade practices from other countries. With both the global sentiment of reshoring, as well as the current administration's protectionist policies, Ferroglobe seems like a prime company to take advantage as a purely Western miner and producer.
* **USA:**
* Silicon Metal: As of January 15, 2026, the USITC officially continued anti-dumping duties on Russia, while new preliminary duties are active against Angola, Australia, Laos, Norway, and Thailand (ranging from 17% to a massive 240%).
* Ferrosilicon: Permanent duties are already in place against Brazil, Kazakhstan, and Malaysia.
* The Goal: Total protection of the domestic supply chain for solar, making Ferroglobe the "de facto" only option for IRA-compliant silicon in America.
* **EU:**
* Ferroalloys (Ferrosilicon, Manganese): A 3-year "Safeguard" began on November 18, 2025. It limits duty-free imports to 75% of recent historical levels. If imports exceed that quota, they must pay a duty that forces their price up to a €2,408/ton threshold (nearly double last year's market lows).
* The Result: This grants Ferroglobe a "virtual monopoly" on European ferrosilicon sales through 2028, according to industry analysts.
* \*Notably, Silicon was excluded from EU's rulings
**2. The French Energy Deal** As of Jan 1, 2026, $GSM started a new multi-year energy contract in France.
* 12-month runtime with stable, nuclear-backed rates. This significantly lowers their "cost per ton" through better fixed-cost absorption (avoiding having to start and stop their plants) and gives much more reliable costs, avoiding surprise margin compression.
So, these points are basically the normal bull case. Trade protections + controlling energy costs should help the company bounce back to historical norms and remain stable for years. But I haven't touched on the ultra-bull case yet, Ferroglobes entrance into EV batteries.
# Coreshell Partnership and pivoting to EV Batteries
Ferroglobe has partnered and invested heavily into **Coreshell** to produce silicon anodes for EV batteries, replacing graphite anodes. This is where it gets a little technical mumbo jumbo to me, but from what I have read, the technology looks promising but its a big IF as of right now. Take a read from their website:
[Coreshell Website](https://www.coreshell.com/post/from-quartz-to-next-gen-batteries-a-dive-into-metallurgical-silicon#:~:text=As%20a%20result%2C%20Coreshell%20has,%25%20domestically%2Dsourced%20metallurgical%20silicon.)
* **The Tech:** Silicon anodes can hold 10x the energy of graphite. Silicon typically expands and degrades during charging (breaking the battery), Coreshell has a proprietary "nanomaterial coating" that stabilizes Ferroglobe’s silicon.
* **$GSM** is currently shipping "A-samples" to global automakers to test in theoretical vehicle fleets (rumored to include **Volkswagen/PowerCo**, possibly Stellantis and Ford & GM as well).
* **The Advantage:** $GSM uses a proprietary "metallurgical" purification (99.995%) that is **cheaper and greener** than anyone else's. Additionally, since the entire process is done in America, it is IRA-compliant and is 100% China-free, which is huge for American car manufacturers.
* **Catalyst:** Watch for a site announcement for their **100 MWh facility** in the US "Battery Belt" in early 2026.
I liked this table summary from Gemini that explains the huge upside here:
|**Metric**|**Current (Commodity Business)**|**Future (Battery Silicon)**|
|:-|:-|:-|
|**Product Type**|Low-margin bulk alloys ($1,500/ton)|High-margin specialty material ($5,000+/ton)|
|**EBITDA Margin**|**5% – 10%** (Highly volatile)|**30% – 50%** (Projected for specialty silicon)|
|**Revenue Stability**|Driven by construction & steel cycles|Driven by multi-year automotive contracts|
|**Pricing Power**|"Price taker" (Market sets the price)|"Price maker" (Patented technology)|
And here is a good timeline from Gemini of production on the EV batteries and when to expect them to impact earnings:
|**Phase**|**Timing**|**Revenue Source**|
|:-|:-|:-|
|**Pilot Phase**|**Now (Early 2026)**|Automakers pay "validation fees" to receive A-sample and B-sample 60 Ah cells for fleet testing. This is low-volume, high-prestige revenue.|
|**Initial Production**|**Late 2026 / Early 2027**|Once the 100 MWh plant is commissioned, they start shipping "commercial volumes." Revenue begins to hit the books as **Specialty Silicon** sales.|
|**Mass Market Scaling**|**2028+**|This is the "jackpot." If the 100 MWh plant proves the tech works at scale, they will likely build a **GWh-scale (Gigawatt-hour)** facility or license the tech to automakers.|
# The Numbers & Valuation
* **Current Price:** \~$5.34 (note that the stock has gone on a huge runup in the past few months so the "value" aspect of the stock has diminished)
* **Net Debt:** Only \~$5M–$15M (Very low for this industry).
* **Cash on Hand:** \~$121M.
* **Price Targets:** \* **Base Case (Survival):** $6.50 (+22%) - Just a recovery to historical norms.
* **Bull Case (EV Success):** $12.00 (+125%) - If they get re-rated as a "Green Tech" company with patented tech for EVs.
I don't think the company will be going under anytime soon. They will have to invest a lot of their cash into building the 100 MWh battery plant, but they won't have to take on dangerous amounts of debt. Obviously, there are risk that things won't go to plan and the stock price will probably go down or flat.
I think with more momentum, the stock obviously has a lot more potential. I haven't seen it discussed at ALL anywhere on Reddit.
# The Risks
1. **Execution Risk:** If the 100 MWh battery plant is delayed or the tech fails automaker "torture tests," the "tech premium" evaporates.
2. **China Circumvention:** Chinese producers are notorious for shipping through "backdoor" countries to avoid duties. If the new safeguards leak, margins won't recover.
3. **Commodity Pricing:** If we hit a global recession, even with duties, the lack of demand from steel/aluminum could keep earnings flat.
# Key Dates to Watch:
* **Late Jan 2026:** Final USITC ruling on Silicon Metal duties.
* **Feb 18, 2026:** Q4 2025 Earnings Call (The first look at the "new" margin profile).
**TL;DR:** $GSM is a debt-free, vertically integrated giant with a massive Western "trade shield" starting now and an EV battery catalyst that could re-rate the stock 2-3x. I’m waiting for the Feb 18th earnings call to confirm the margin expansion and when they will announce their battery plant. If you have an appetite for some speculation alongside your value, consider checking it out.

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