Ferroglobe's Q4 2025 Results: Trade and Energy Gains Fail to Offset Deep Losses

What happened

Ferroglobe reported a Q4 2025 net loss of $81 million and a full-year loss of $170.7 million, highlighting continued stress from Chinese imports and weak demand in silicon and alloys markets. The company emphasized positive momentum in U.S. antidumping duties and EU ferroalloy safeguards, along with a new 10-year French energy contract to reduce cost volatility, painting an optimistic picture for 2026. However, these developments are preliminary—U.S. duties are not final, and the EU safeguards exclude silicon metal, leaving core European operations unprotected. Despite the losses, Ferroglobe touted a strong balance sheet with $123 million cash and low net debt, even raising its dividend, which may distract from the underlying earnings deterioration. The narrative mirrors the DeepValue report's caution, as the stock's recovery thesis remains dependent on unproven policy outcomes rather than fundamental improvements.

Implication

The new French energy contract provides some cost stability but does not fully address post-ARENH uncertainties or guarantee competitive power rates for European restarts. U.S. trade case progress is encouraging, but final duties and their translation into higher realized prices are still pending, with no assurance of margin uplift. Strong liquidity and a dividend increase signal management confidence but could strain cash if the recovery is delayed, given ongoing operational losses. Continued financial stress underscores that without EU silicon metal remedies, European assets remain idled and uneconomic, limiting near-term earnings potential. Thus, at $4.89, the stock already discounts much of the optimistic scenario, making entry premature until concrete evidence of pricing power and margin expansion emerges.

Thesis delta

The DeepValue thesis of waiting for confirmation on trade protection and energy frameworks sees minor progress with the French contract and U.S. duty momentum, but the lack of an EU silicon metal remedy and persistent losses mean key risks remain unmitigated. No material shift in the investment call from 'WAIT' is warranted, as the recovery narrative still relies on speculative policy outcomes rather than current fundamentals.