Ferroglobe (GSM) Shares Drop 1.26% to 13-Month Low Amid Industry Headwinds and EU Policy Uncertainty

Ferroglobe (GSM) shares plunged to a 13-month low on October 15, 2025, with an intraday drop of 1.80% before closing down 1.26%. The decline marked the first time since October 2025 that the stock traded at this level, reflecting renewed investor concerns over the company’s operational and market challenges. Despite a significant share buyback program and a modest dividend in August, the stock remains under pressure as industry-specific headwinds persist.

The company’s aggressive share repurchase strategy, which included $52 million spent to retire over 7% of outstanding shares by September 30, 2025, has not been enough to offset broader uncertainties. While buybacks typically signal management confidence and can boost earnings per share, their impact appears muted against ongoing production constraints and volatile pricing dynamics in the ferroalloys sector. Investors are scrutinizing whether Ferroglobe can stabilize output and reduce costs to meet its 2028 financial targets, which project $2.0 billion in revenue and $222.1 million in earnings.

Industry headwinds remain a critical factor. Ferroglobe’s exposure to EU safeguard policies—pending measures that could either reduce foreign competition or intensify pricing pressures—adds regulatory uncertainty. The company’s European operations, a key revenue driver, are particularly vulnerable to trade policy shifts. Analysts note that any liberalization of import rules could exacerbate margin compression, while protective measures might offer temporary relief. This duality underscores the sector’s sensitivity to macroeconomic and geopolitical factors beyond corporate control.

Operational challenges further weigh on investor sentiment. Prolonged production curtailments have already strained margins, and the company’s ability to maintain consistent output remains a concern. While the share buyback and dividend signal a commitment to shareholder returns, they do not address underlying inefficiencies. The August dividend, though symbolic, highlights the delicate balance between capital preservation and reinvestment in a volatile market. Sustaining payouts in the face of weak demand or production disruptions could become a test of management’s resilience.

Looking ahead, Ferroglobe’s trajectory hinges on its capacity to navigate these interlocking risks. The projected 44% upside to $8.00 per share, based on 2028 forecasts, assumes a successful execution of cost-cutting, production optimization, and regulatory tailwinds. However, divergent fair value estimates—from $8.00 to $20.46—reflect the market’s skepticism about the realism of such targets. Investors are advised to monitor upcoming EU policy decisions and the company’s operational performance closely, as these will likely dictate the stock’s near-term direction.