Elkem hopeful of silicones recovery despite first quarter losses

Oslo – Elkem SA’s silicones business remained weak in the first quarter of 2024, but the Norwegian supplier can see “signs that demand is picking up.”

The Sinochem-owned manufacturer reported a negative earnings (EBITDA) development at its silicones segment for the quarter.

Losses of NOK103 million (€8.8 million) in the first three months of this year, compared to a loss of NOK30 million in the same period of 2023.

Sales for the silicones division dropped 19% year-on-year to NOK3.3 billion, as volumes fell 20% year-on-year to 79,000 tonnes, Elkem reported 18 April.

First quarter results for the silicones division were hampered particularly by 'seasonality' in the Chinese market, noted the statement.

Overall, the Norwegian group said commodity sales prices improved during the quarter, but demand remained weak.

“There are signs of demand recovery, but the uncertainty is still significant,” it added.

Elkem went on to explain that markets were ‘generally weak’ during the first quarter, particularly in the construction segment and the automotive sector in the US and the EU.

But there are signs of recovery, Elkem reporting that the order situation had improved for the second quarter.

Elkem's silicones division was in red in 2023, reporting a loss of NOK605 million for the year, compared to prior-year earnings of NOK2.0 billion.

In the fourth quarter of last year, the Norwegian supplier noted some recovery in earnings due to its “internal improvement programmes taking effect.”