Elkem earnings double as market conditions remain attractive

Oslo – Elkem SA has delivered an all-time high revenue for the third consecutive quarter as conditions remain "good" in all its main markets.

Second quarter earnings (EBITDA) more than doubled to NOK1.37 billion (€130 million) on 25% year-on-year higher income of NOK 7.3 billion, the company announced 16 July.

Elkem linked the growth, in part, to good demand and high prices within the silicones market, which helped improve its results ‘significantly’ compared to the second quarter of last year. 

The growth in the silicones market, it noted, was achieved “despite higher raw material costs and scheduled maintenance stops both in China and France.” 

For the short-term outlook, Elkem said market sentiment was strong across all divisions. 

“The market momentum for silicones is strong and prices are at high levels in China and [the prices are] expected to increase in Europe and the US,” the company said. 

In particular, Elkem noted that prices for DMC, a key raw material for production of silicone rubbers, increased to above Yuan30,000 per tonne in China in the month of June, impacted by a fire at a “large-scale” plant.

Demand, it said, is currently very strong in China as ‘the market balance is very tight’ and most producers are operating at full capacity. 

However, Elkem said that the high price level in China was not seen as sustainable, as "limited new capacity" would potentially come on stream in the second half of the year.

With strong demand and high prices for its products, the Norwegian group said it is in a strong financial position for further growth. 

“Elkem is in a very strong position,” said Helge Aasen, Elkem’s interim CEO, “We see a positive market outlook and continue our work to position Elkem for the future.”