Elkem warns on Q2 profit as China-U.S. trade war bites
OSLO, June 13 (Reuters) - Oslo-listed Elkem ELK.OL, a major supplier to metals makers and chemical industries, warned on Thursday of a plunge in second-quarter earnings following a recent hike in U.S. tariffs on imports from China and a production delay in France.
Majority-owned by China National Bluestar since 2011, Elkem makes ferroalloys for steelmakers and silicon for aluminium alloys as well as silicones that are used in industrial and consumer products, and other materials.
"The result for the second quarter is estimated to be approximately 25% weaker than the first quarter," Elkem said in a statement.
It had previously expected second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) to rise from the 852 million Norwegian crowns ($98.5 million) it made in the first quarter.
"The silicones market has developed significantly weaker than expected, following the new tariffs on U.S. imports from China," Elkem said.
"In addition, the Roussillon upstream silicones plant in France has had a delayed restart after the maintenance stop in May," it added.
Silicones are used in a variety of products from electronics and cars to medical products such as implants.
It was the company's second downgrade of forecasts in eight months as it struggles with the effects of the trade dispute between Washington and Beijing.
Confidence is also weak in the markets for silicon metal and ferrosilicon, key ingredients used by steelmakers and other smelters, Elkem said.
($1 = 8.6508 Norwegian crowns)
(Reporting by Terje Solsvik; Editing by Mark Potter)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.