Good day, ladies and gentlemen, and welcome to the Ferroglobe First Quarter 2019 Earnings Investor Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today’s conference is being recorded. I'd now like to introduce your host for today's conference, Mr. Pedro Larrea, Ferroglobe's Chief Executive Officer. Sir, please go ahead.

Good morning, everyone, and thank you for joining the Ferroglobe first quarter 2019 conference call. Unfortunately, Phil Murnane, our CFO, cannot join on today's call as he is attending the funeral of a close family member, which is taking place as we speak. In any event, Phil will be fully available for the investor calls in the coming days. On behalf of Ferroglobe, we send our sincerest condolences to Phil and his family and we greatly appreciate his continued dedication and commitment under a very difficult personal circumstances. Joining me on the call are Gaurav Mehta, who was recently appointed EVP of Investor Relations, in addition to his ongoing role of EVP of Strategy; and José María Calvo-Sotelo, the Deputy CFO. Before we get started with some prepared remarks, I am going to read a brief statement. Please turn to slide 1 at this time. Statements made by management during this conference call that are forward-looking are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Ferroglobe's most recent SEC filings and the exhibits to those filings, which are available on our webpage, www.ferroglobe.com. In addition, this discussion includes references to EBITDA, adjusted EBITDA and adjusted diluted earnings per share, which are non-IFRS measures. Reconciliations of these non-IFRS measures may be found in our most recent SEC filings. Next slide please. On the call today, we will review the Q1 results across our core products, including some consolidated financial highlights. Then we will provide an update on market outlook for the remainder of 2019 and the company's near-term plans. On slide 3, as you have seen in our earnings press release, all in all, first quarter results were disappointing and the rate of deterioration in end market demand and pricing increased compared to what we anticipated a few months back. During the start of 2019, our business has been faced with reduced volumes, continued pressure on pricing and relatively high costs for many of our raw materials. Collectively these factors resulted in a quarter with performance significantly down from the previous quarter and at multi-year lows in our EBITDA. In this challenging context, our priority has been cash generation and our focus on strengthening our balance sheet for the cyclical downturn. And that is exactly what we have been doing over the past two quarters. Notwithstanding our reduced financial results, our net debt continued to decrease during Q1 and we closed the quarter at approximately $420 million, implying net leverage of 2.4 times. While the net leverage number have come up, we are at the very comfortable level and one at which we have certainly operated during this time -- this type of down-cycle in the past. Further, we continue to reduce our working capital, which have historically proven difficult at the start of the year. We ended the first quarter with a strong cash position of $217 million and total liquidity of $285 million, with available liquidity, subject to existing covenants under the recent RCF amendment. Overall, we are comfortable with our debt level and liquidity but feel the prudent thing to do is to continue to derisk the business by strengthening our balance sheet even further. The biggest development for this continued strengthening of the balance sheet has been the signing of an agreement for the divestiture of some of our Spanish assets. We have signed a contract to sell 100% of the interest in our noncore Hydro assets in Spain, together with the ownership of the Cee-Dumbría ferroalloys factory particularly down to the hydro assets, for a total value of approximately $190 million. This noteworthy transaction enabled us to pay down debt and/or increase our cash position, ultimately achieving a pro forma level of net debt of around $236 million, down from approximately $420 million at the end of the first quarter. This immediately alters the financial profile of our business. We will go into the details of this on today's presentation. Additionally, we have an update on the refinancing initiatives we mentioned last quarter. We are currently making significant progress in the refinancing of our revolving credit facility with the aim of eliminating leverage based financial covenants and removing restrictions on cost -- on cash growings. With these various initiatives advanced at this stage, we continue to target net debt below $200 million. Given the challenges in our business and the actions we’ve taken, there's a lot of ground to cover on today's call. We will provide further details on all of these areas. So if we move to slide 5. Overall volumes were down 23% quarter-over-quarter as the majority of our product portfolio was impacted by a slow down in end customer demand. The most significant driver of the Q1 results was reduced pricing, specifically average sales price for silicon metal declined 2.9% versus Q4 2018 and average sales prices for silicon-based alloys fell by 2.9%, while manganese-based alloys improved by 1.2%. The net impact of weaker volumes and pricing during the quarter yields a 24.3% decline in our topline revenue. Although, we saw cost improvement during the quarter in input such as manganese ore and in overhead, these were offset by cost increases in critical inputs such as power rates reduction, lower interruptibility rebate in Spain and inventory write-downs. Reported and adjusted EBITDA in the quarter was $11.8 million, down 63.3% from $32.1 million during the prior quarter. The decline in revenues, coupled with higher costs, led to EBITDA margin compression in the first quarter to 2.6%, a decline of 274 basis points from the prior quarter. Given these trends, we are actively making changes to our commercial, operational and financial strategy, which we will touch upon during this presentation. Next slide please. As expected, Q1 2019 continue to be affected by the headwinds we referenced in our Q4 2018 results. Our consolidated sales for the quarter have decreased 24.3% from $604 million in Q4 2018 to $457 million in Q1 2019. Revenues across our three primary product categories were down quarter-on-quarter, due to the combined effects of lower volume and/or weaker pricing that I have already mentioned. Also, it is worth noting that for manganese alloys Q4 is not a good comparative. Since the Q4 sales were extraordinarily high due to the significant volume spillover from Q3. For this reason, taking an average of Q3 and Q4 could serve as a better indicator of performance. This revenue weakness combined with continued cost pressure led to a 63.3% decrease in adjusted EBITDA to $11.8 million for Q1 2019. Although, current quarter performance signals multi-year lows, it is not unchartered territory in terms of through the cycle's earnings. Next slide please. Adjusted EBITDA declined $20.3 million over the previous quarter from $32.1 million in Q4 2018 to $11.8 million in Q1 2019. The biggest contributor to the decrease in quarter-over-quarter adjusted EBITDA was a decline in average selling prices, which were lower in both silicon metal and silicon alloys with a marginal improvement in manganese alloys. In the aggregate, the realized selling price of the region across all products resulted in a negative adjusted EBITDA impact of $12.3 million during the quarter. Volume declined across the portfolio negatively impacted this quarter's adjusted EBITDA by 6.1% – sorry, $6.1 million as volumes decreased 23%. Cost and foreign exchange movements, which have been a major contributor to adjusted EBITDA variances in prior quarters has had a lower impact this quarter. The cost increase of $2.4 million compared to previous quarter includes inventory write-downs across all core products of approximately $6 million and negative impacts of decreased Spanish power rebates of approximately $5 million. These were partially offset by cost improvements in the plant including approximately $2 million in manganese ore price improvement. Our energy business was down $3.4 million in the quarter. As we highlighted in prior quarters, 2018 was exceptional for this business, and we did not expect this trend to continue. Finally, other factors improved by $2.6 million. This includes improvement in overheads of $1.5 million, reduced expenses of the idled solar projects of $1.6 million, partially offset by the severances of $0.5 million. The other category also includes a number of one-off non-cash items, some positive and some negative that offset one another in total. For instance, positive $4.2 million of the reversal of some expense positions associated with the liquidation of Mangshi plant in China, positive $2.6 million from the adoption of IFRS 16 for operating leases or negative $6.9 million, because of the income accrual of CO2 grants, which we've mentioned in Q4 2018. Next slide please. On the next few slides, we will discuss pricing and volume trends, earning contributions and market observations for each of our key products. Turning first to silicon metal on slide 8. Ferroglobe's realized average selling price for silicon metal declined by 2.9% to $2,358 per metric ton as compared to $2,429 per metric ton in the fourth quarter of 2018. Prices across North America, Europe and China have gradually returned to levels we last saw in 2017. While there has been a steady decline, it is important to put this in context, noting that current levels are not out of line with historical evolution. The U.S. index pricing had a slight decline at the beginning of the year, but remained flat since mid-February through the end of the quarter. Meanwhile, European index pricing edged up during Q1 from year-end levels. During Q2, the index prices continue to reflect pressure on the silicon metal market and additional capacity cutbacks have been outpaced by the slow down in demand. The top – bar chart on the top right of slide 8 shows the decline in volumes over the record high prior quarter. Volumes during the quarter were negatively impacted by a slowdown across all of our end markets and by our own conscious decision of cutting back productions capacity. The cost increases we have been taking in silicon metal productions have started to reverse and technical performance as well as active portfolio management are contributing to a better cost of structure. However, in Q1 cost were negatively impacted by approximately $2.1 million inventory write-down. Next slide please. Turning to silicon-based alloys. Overall, EBITDA contribution from this product category declined as a result of lower pricing and increased cost pressure. During the quarter, the average selling price decreased by 2.9% to $1,669 per metric ton, down from $1,719 per metric ton in the fourth quarter of 2018. Although, demand was stable during the quarter, the pricing pressure we saw in the fourth quarter continued into this year with capacity from new market entrants and converted capacity impacting silicon alloys supply. Sales volume was steady at $81,801 metric tons in Q1. Recent announcements by steel producers of shutdowns and capacity reductions are now expected to impact sales during the remainder of 2019. As a result, we are actually considering capacity curtailments in ferrosilicon. The silicon based alloys business was also impacted by approximately $8 million of additional costs during the quarter, including the impact of increased power costs and raw materials, as well as an inventory write-down of approximately $2.6 million. Foundry products, which represent approximately one-third of our overall silicon based alloys segment had similar sales volumes to prior quarters. Next slide please. Turning now to manganese based alloys. This product category was a negative contributor to our portfolio in 2018. The unforeseen dynamic which prevailed during 2018 was the de-linking of manganese alloy prices from ore prices, which lasted longer than anticipated and weighed negatively on our results throughout the year. The EBITDA trend line during Q1 and recent developments in the manganese ore pricing suggests that this dynamic is now starting to reverse and leave the potential for manganese alloys to add improvement during the second part of 2019. Our average realized price for manganese based alloys increased 1.2% to $1,172 per ton, up from $1,158 per ton last quarter. Index prices for both -- for manganese and silica manganese have remained stable during Q1 and we have seen this continue into the second quarter. Volume has dropped by approximately 30% quarter-over-quarter. Firstly, this reflects the exceptionally high volume shipped during Q1, driven by logistical issues at the end of Q3, which we have discussed on previous calls. So -- a better life-for-like comparison would be the average volume during Q3 and Q4, as compared to Q1. Making this comparison, volumes still decreased in Q1 due to the decisive cutbacks in production that we implemented at the end of 2018. Product margins have improved due to lower manganese ore prices, improvements in labor and other input costs and reduced inventory write-down compared with Q4, 2018. Manganese ore prices have begun to show early signs of decline, although slower than expected and further declines are taking place during Q2. I want to point out that, normally we would provide a detailed reconciliation of EBITDA by products. In the interest of time and given the number of recent developments to review during the call, we have included some of our routinely disclosed information as an appendix to the presentation for those who would like further details. With that, I would now like to turn the call to Gaurav, who will review the balance sheet and cash flow in more detail.

Thank you, Pedro. Turning now to slide 11. The working capital decrease in the first quarter, $5 million was driven by a reduction in inventories and accounts receivable, partially offset by a decrease in accounts payable. Both these movements reflect the quarterly decline in sales and operating volumes. Our focus on cash generation resulted in cash and cash equivalents, remaining unchanged from the prior quarter at record levels of approximately $217 million. Maintaining the strong cash position have been achieved despite a number of factors, including weak quarterly P&L performance, interest payments of $18.5 million during the quarter due to – our bond coupon, the evolution of payables after yearend and the delayed receipt of up to $15 million in last year. Next slide please. The cash generation initiatives including the decrease in working capital drove a reduction in our net debt levels by $9 million. We ended the quarter with net debt of approximately $420 million and with net leverage remaining at a comfortable level of 2.4 times, well below levels we have navigated in prior cycles. Next slide please. On slide 13, we look at our cash generation in more detail. The profit for the first quarter was negative $28.6 million. Adjusting for non-cash item, our profit was approximately $13.6 million. The net change in inventories, accounts receivable and accounts payable contributed to the positive operating cash inflow of $15.2 million. The cash was then used for interest payments of $18.5 million and income tax payments of $1.6 million, resulting in net cash provided from operating activities of $8.7 million. Payments for maintenance CapEx were contained at a level of $13.4 million, resulting in free cash flow for the first three months of negative $4.7 million. As we consider our near-term initiatives, we remain committed to deleverage and to strengthen the balance sheet. In that context, I will now update you on various actions we've undertaken. Our first priority is de-risking the balance sheet. We are making significant progress in the refinancing of our revolving credit facility seeking to remove leverage based financial covenants and ensuring availability of funds. We expect to replace the RCF with two new facility. We are currently pursuing the first-lien senior secured term loan for up to $125 million. The term loan will be secured with a subset of PP&E in the United States. Today, we have received significant commitments from our investors and expect to close the new term loan around the end of the second quarter. The second part of the refinancing is an asset base revolving loan secured with accounts receivable and inventories in the United States for a total facility size of up to $140 million. We also expect to close this loan around the end of the second quarter. In addition to the refinancing, we are simultaneously pursuing a number of non-core asset divestitures, particularly the sale of the specific assets in Spain, which are expected to deliver $190 million. This transaction is expected to close during the third quarter. Pedro will provide some further details around this transaction later in the call. Additionally, we are actively pursuing a number of non-core asset sales, which are at different stages. These include the South Africa timber and select quartz mined in South Africa, our cored-wire facility in Poland, the French hydro assets and our ferroalloy facility in Venezuela. We have made progress in the liquidation of our Mangshi facility in China. Although this will not generate immediate cash flow, it does get rise to approximately $24 million of future tax credits to be used against future profits from our Spanish operations. We are currently in the process of filing for legal consensus for sector liquidation. This process can take around 45 days with completion expected in the third quarter. And finally, we are committed to new cost cutting measures, as well as CapEx control initiatives in that critical maintenance, environmental and safety related CapEx. With that, I’ll now turn the call back to Pedro to review the near term outlook of the business.

Thank you, Gaurav. So if we turn now to slide 15. During our previous earnings call at the end of February, we noted the changes in sentiments expressed by our customers and industry analysts across our end markets, as they provided their outlook for 2019. The activity levels realized during the first quarter suddenly confirms this high degree of caution, and our ongoing discussions with customers reinforce that this sentiment will linger. Despite the uncertainty surrounding trade conflict and political instability, the global macro environment continues to be perceived by most analysts and experts as relatively strong. So the kind of demand slowdown we are witnessing in our end markets is somehow surprising. While it is impossible to pinpoint all the specific reasons driving the change in customer behavior, there are certain trends which are clearly impacting our sales into each major end market. Sales of silicon-based alloys and manganese-based alloys into the steel sector are impacted by a slowdown in steel demand, although, coming down from historical highs. In our various Q1 results forecast, several global leaders in the steel sector announced lowered expectations for the year and planned actions to curtail capacity. This trend will clearly continue to impact our business into the steel sector. Our sales into the aluminum industry are being impacted by the slowdown in the automotive industry, as manufacturers struggle with evolving emissions regulations and trade war -- and trade war uncertainty amongst other factors. Beyond auto sales, customers are also commenting on general slowdown in demand for aluminum going into building and construction, all the transportation including airplanes and everyday consumer goods. The most perplexing end market is chemicals. Our silicon metal ultimately goes into thousands of everyday consumer and industrial products. Given the relatively healthy global economy, the drop in volumes into this market experienced at the beginning of 2019 was surprising. We believe that what is transpiring here is a greater focus on inventory management among our customers, who have appear to be de-stocking and not only a real fall in -- on end user demand. And finally, a picture for the photovoltaic industry has not changed much, as industry continues to suffer from low prices following the ongoing trade war actions. As a result of this market environment, many of our customers have cut back production and idled facilities, which has directly impacted us. We do not see a reversal of this trend in the immediate term, but we believe that going forward the solar market will continue to grow at attractive rates and will be an important part of our business in the long-term. Next slide please. The commercial outlook across our portfolio for 2019 reflects the evolving picture and uncertainties ahead. Our silicon metal sales will be impacted by the slowdown we just described in the aluminum, chemicals and photovoltaic end markets. In response to this, there have been curtailments announced by ourselves and other industry producers and we now expect further actions to be taken to balance the market. The continued erosion of the index prices will suddenly impact selling prices into Q2. As the supply and demand pictures evolves, there will be tightness in the market, leaving the door open for a potential increase towards the end of the year. The manganese alloys business will be impacted by a drop in overall steel demand, more so than any implications from the trade war. Improving dynamic in manganese ore prices during the past few weeks should help this business return to healthier profitability in the second half. In addition to declining ore prices, we are making changes to the ore mix and recycling of byproducts to further improve margin. To further augment the overall mix and economics for this business, we are focused on our refined grade sales, which have significantly higher margins. This currently represents 15% of our manganese alloys book. And finally, the same trends in steel will impact our silicon-based products, mainly ferrosilicon. While prices for ferrosilicon are showing some signs of stabilizing, we are prepared to take actions to curtail production as required. The foundry business continues to grow with stable prices. Next slide please. On a positive note, some of the cost factors have negatively impacted our performance in the past 12 to 18 months are showing clear changes in the pricing pattern. Significant raw materials, such as coal, met coke or electrodes have definitively reduced in cost in recent months, and most industry experts would agree that the trend is likely to continue in the near future. Other cost factors remain challenging in the short-term like power prices in Spain, due to changes in the remuneration of interoperability and other regulatory changes. The manganese spread is defined as the selling price for manganese alloys, less the cost of manganese ore, which can be seen in the chart on the left side of this slide. These spreads have been volatile historically. However, sharp growth in spreads have generally reverted quickly. Throughout 2018, this business was pressured with a sharp decline in spreads, particularly during an extended period when manganese ore prices stayed unusually high. The dynamic we experienced in 2018 lasted longer than expected and prompted us to curtail production. This trend has been reversing since the later part of the fourth quarter with modest gains in manganese alloys index prices at the end of 2018 and a sharp decline in ore index prices during January 2019. The trend of widening spreads has regained momentum during Q2, with spread levels starting to approach historical averages. Most experts predict further widening of spreads in the coming months. Should this trend continue, we could see a positive impact in our manganese alloys business in 2019 as early as Q2. Next slide please. We remain committed to deleveraging and strengthening the balance sheet even in the current challenging market environment. As such for 2019, we are implementing a number of actions. Action 1, we are currently making significant progress on the refinancing of the RCF seeking to remove leverage-based financial covenants and ensuring the availability of funds. Gaurav has already referred to this a few minutes ago and has provided details regarding the structure and expected timeline. Action 2, during the Q4 call, we committed to further assets divestitures. As I said earlier, we have signed the sale of certain of our Spanish assets for €170 million. The completion expected in Q3 2019. I will talk about the transaction in more detail in the coming slides. Additionally, we continue to pursue other noncore asset divestitures that have already been mentioned by Gaurav. Action 3, we have launched cost-cutting initiatives across the organization including corporate overhead reductions, operational efficiencies through the KTM project, and reductions in plant level fixed cost. And Action 4, CapEx control, we have minimized non-essential maintenance reducing CapEx spend to around $60 million to $70 million in 2019. With all these actions, we continue to target a net debt level of below $200 million. Next slide please. The transaction for the divestiture of some of our Spanish assets is based on two agreements; the sale of the purchase agreement for the assets and an associated tolling agreement for the Cee-Dumbría factory. Under the sale of purchase agreement, the investor will acquire 100% of FerroAtlántica S A U totally referred to as new plant which includes all the hydro plant in Spain and the ferroalloys factory of Cee-Dumbría. This way we fully comply with the regulatory requirements of maintaining this factory particularly bound to the hydro concessions. At the same time, Ferroglobe will enter into a tolling agreement with NewFAT governing the operation of the ferroalloy factory in the long-term. The tolling agreement will regulate how the factory of Cee-Dumbría will be upgraded appointing Ferroglobe as exclusive off taker of the finished products of the factory and supplier of key raw materials. And Ferroglobe, despite not being the owner of the assets, will have exposure through their underlying business. Total value of the transaction will be €170 million or approximately $190 million. The closing adjustment mechanism based on completion accounts will consider movement in net debt and working capital and the cash flow from operations for 2019. An escrow account of €10 million will be established to secure seller payment obligations under the SPA to be released in 24 months and there's also announced restructuring in case of divestiture of assets by investors. The condition precedent foreclose are primarily administrative and not expected to be contentious. There are three conditions precedents which require external approval. First, administrative authorization required for the termination of the lease facility agreement and the amendment of the co-ownership regime of the concessions. Similar authorizations were granted by the same government body for previous early cancellations in 2002 and 2012. The second condition precedent is antitrust clearance regarding only the ferrosilicon business of Cee-Dumbria in Spain. With no change in the competitive dynamics of this market, we expect a very rapid resolution to these items. And the third condition precedent is authorization of Ferroglobe lenders under the RCF and cancellation of the existing pledge over FerroAtlantica shares pledges over a number of FerroAtlantica assets. Given the liquidity benefits of the transaction and given the renegotiation of the RCF facility itself, this should pose no issues. We expect $190 million sale and associated tolling agreement to be completed during Q3, 2019. Next slide please. Clearly the divestiture of some of our Spanish assets will significantly deleverage the Ferroglobe balance sheet. We would expect cash to increase $334 million and gross debt to decrease to $570 million, resulting in an improvement in net debt of $184 million. Net debt on a pro forma basis would be $236 million. Obviously, depending on the evolution of the business and once the refinancing we have mentioned is concluded, the amount of cash could be significantly reduced to pay down the additional tranches of our credit facilities. At current LTM EBITDA, the pro forma net debt of $236 million translates to a leverage of 1.5 times. Next slide please. Cost savings target have been implemented at all levels of the organization, including corporate overheads, where $10 million savings is targeted for 2019, representing run rate savings of $25 million. Corporate savings include consolidation of corporate offices, reduction of third-party consultants and services, significant reduction in travel, and reduction in outsourced legal work. Our key technical metrics program or KTM is expected to deliver $15 million savings in 2019, with run rate savings of $25 million. The KTM program is focused on achieving performance improvement, focusing through increased productivity and efficiency, including changes to raw material mix and focus on by-product recycling and changes in electrode technology. Plant level fixed costs are expected to contribute savings of $15 million in 2019, representing run rate savings of $25 million. Targeted savings and plans include, stock reduction, mainly in support functions, improved purchasing processes for services and materials and the reduction and optimization of inventories for spare parts and consumables. In aggregate, total run rate savings are targeted at $75 million. Next slide please. So all-in-all, first quarter results were disappointing and the rate of deterioration in end market demand and pricing accelerated, compared to what we anticipated a few months back. During the start of 2019, our business have been faced with reduced volumes, continued pressure on pricing and relatively high cost for many of our raw materials. It is uncertain when the trend will reverse, but we have a proven track record of navigating through similar circumstances and the whole organization remains focused on cash generation, cost-cutting and returning to profitability. In this challenging context, our priority has been cash generation and focus on strengthening our balance sheet for the cyclical downturn. We ended the first quarter with a strong cash position of 20 -- $217 million and total liquidity of $285 million. Although, I would love to clarify that our available liquidity is subject to our known existing covenants. With the non-core asset divestitures, we've just announced and with the completion of the refinancing initiatives, this liquidity position should improve even further. Our net debt continued to decrease during Q1 and close the quarter at $420 million. With all the cash generation initiatives, we are undertaking our target to reduce this net debt levels to below $200 million. The hydro assets divestiture will allow us to reach approximately $236 million already by the end of Q3. Finally, the whole company is focused on returning the business to profit -- thus we have initiated a new cost cutting program which will yield approximately $75 million in run rate savings. We are looking at each part of our business and feel confident that there is room to make significant changes to streamline our corporate overhead costs, closely manage our capital expenditure and continue our ongoing programs to technically improve operations at our plant and thereby, improve productivity and lower cost. Fundamentally, we continue to operate on unrivaled set of assets with very attractive market and operational diversification, best-in-class technical performance and a high degree of vertical integrations. Our business has significant value as we have seen in the recent past and we are committed to recovering this value for our shareholders. We look forward to updating you on the various initiatives highlighted on today's call. Thank you for your time and participation this morning. And at this time, I would ask the operator to open the line up for questions.

[Operator Instructions] Our first question comes from the line of Vincent Anderson with Stifel. Your line is now open.

Yeah, thank you. So just with regards to volumes, if this current demand environment were to hold here for the remainder of the year purely hypothetically, what would your volumes look like on the year-over-year basis?

Well, as you've seen, mainly on silicon metal, there is a significant decrease in total volumes in Q1. I wouldn’t expect today that such low volumes would continue for the entirety of the year. But you could of course make the arithmetic calculation of what would be the decline in volumes for silicon metal. When we look at both manganese alloys and silicon alloys, our expectations today is that, Q1 volumes are sustainable for the rest of the year and we would be even contemplating if granted by demand and price evolution that there could be some slight increases in volumes for manganese alloys in the second part of the year.

All right. That's helpful. So I'm assuming your electrode prices are more or less fixed for 2019, but how should we think about the margin impact of declining coal prices and when we could start to see that show up in your earnings if we haven't already?

That has started to show slightly in the margins and in the second half of the year, you could track almost dollar-by-dollar, the international coal indexes or AP-2 for instance. I think AP-2 in the first half of the -- sorry, in this first five months of the year have dropped like $10 or $15 per ton. That doesn't translate directly to our coal cost, but I would say it mostly reflects into our coal costs. So, we should be seeing significant decrease in coal cost in the second half of the year. If you think of Ferroglobe buying in international markets around 0.5 million tons of coal a year, that is 0.25 million tons in the second half of the year. And if you think of price decreases of $5 to $10 in the second half of the year, that gives you what would be the cost reduction from coal, for instance, again in the second half of the year.

That's very helpful as well. Thanks. I just have one more. Just to clarify on the sale of the hydroelectric assets, this is -- the Dumbria plant is the only one that was originally tied to these assets? Or is there still a risk that the unions pressed for the local authorities to include, for instance, the sub-owned plants in approving a transfer?

That risk doesn't exist in our view.

Okay. Alright. Thanks.

[Operator Instructions] Our next question comes from the line of Sarkis Sherbetchyan with B. Riley FBR. Your line is now open.

Hey, good morning and thanks for taking my question here. So, first, I wanted to ask about just the hydro assets sales. Can you maybe remind us what the sales and EBITDA contribution is for the plants you are potentially going to get rid of the transaction?

Yeah. So, as you know, these hydro assets have slight volatile results as a consequence of volatile hydro activity which is rainfall and also as a consequence of volatile power market prices in Spain. So, EBITDA contributions have, as we have seen fluctuate a lot. In average, in the past five years, the contribution of the assets we are selling are between €13 million to €16 million per year.

Great. Thanks for that. And then if I just kind of step back and think about the comments regarding the additional consideration maybe cutting capacity in ferrosilicon. Maybe can you highlight the amount of capacity you're thinking of potentially cutting?

We haven't made any decisions. Right now in the ferrosilicon arena and what is, I'd say a bit contradicting and we are monitoring is that volumes are healthy. We are seeing good demand from our customers still to date. We have a -- I would say a solid book going forward, but it's just prices of course going down. So, we will -- we are just monitoring loss-making facilities and making sure that we take action as soon as we can. Right now, we have made no decision.

Understood. And I think if I take kind of the comments you outlined with regard to the end markets and some of the slowdowns versus what we're seeing in the global macro picture. Is there something you can point to, to help us understand kind of the differentials and call it metals prices that maybe geographically that's kind of impacting perhaps the volumes or the results? Just kind of help us understand that delta.

Well, if you really scratch through the different products, I would say, when we look at our volume reduction first in manganese alloys, the manganese alloys, really our volume reduction has been a voluntary one. So, the volume reduction is just the capacity cutbacks we have -- we decided to make. The rest of our manganese alloys facilities are running at full capacity. And again, the order book is well filled in and the margins are improving month-by-month. So, on that side of the business, I would say that we are seeing positive trend in terms of margin and stable volumes. If we look at silicon alloys, the main driver is being and you see that in the indexes and we have -- you have the graph there in one of our slides, the driver there is being price decline. And that is just to a large extent getting back to historical averages, but in a context of cost inflation that has really reduced the margins very, very significantly. But again, in terms of volumes that you have seen in Q1, volumes are not suffering all that much. So, it is really silicon metal where we have seen in our end markets, I would say, evolutions that are surprising to a large extent and mainly on the chemical side. We do have some explanation on aluminum. We have talked about the scrap issue in North America. And of course, the uncertainties in the auto industry. So those are, I would say, understandable or explainable. In terms of solar, we believe it is a temporary slowdown and we are very confident that throughout the second half of this year, but that is difficult to tell. We could see a rapid pick up there. And as we were describing in the presentation, it is really on the chemical side where we are a bit more perplexed by a slowdown in demand from some of our or most -- or almost all of our bigger customers. And the only hypothesis -- and it is really a hypothesis, we are not certain about that. The only hypothesis we can make is about some destocking in the entire value chain.

Got it. That's pretty helpful. So you wouldn't necessarily say it's necessarily a loss of customer volume, it's simply destocking?

That is our hypothesis as I was saying. Yes.

Okay. Thank you. I'll hop back in into queue.

We have a follow-up question from the line of Vincent Anderson with Stifel. Your line is now open.

Yes. Thanks. I just wanted to go back to costs for a minute. So with regard to your electricity costs in Europe, so this year I was wondering if you had any expectations for where you can see costs go with the new Spanish interruptibility auctions later in the year? And then looking beyond that, how are you thinking about the competitiveness of assets in the face of increasing carbon emissions? Or recovery emissions costs, I would say.

And so, it's two different questions. With the first one, we do face uncertainty with the -- with interruptibility in Spain. The evolution of the interruptibility rebate in the first half of the year was very, very negative. I would say that, fortunately, this time the auction was only for six months, because it was typically for one year. So now, we are facing another auction for the second half of this year. We hope we would expect that the auction or the results of the auction would be better than first half. But I'm not optimistic that they would be as good as 2018. We also know that there have been some additional regulation on energy intensive consumers like ourselves, with some additional rebates being granted, not huge and there is negotiations taking place with government to improve that further. But right now, frankly, there is still uncertainty as how all of that will evolve. With regard to the implications for divestiture over the hydro assets on CO2 impact. That is really -- it doesn't really apply, we really have up to today two different businesses, one in the energy business, the other is the ferroalloys business. And the ferroalloys business has its own regulation in terms of CO2 impact and how that is measured. And we couldn't really compensate with our hydro asset. So it really has no impact in that regard in my view.

All right. Thanks. And then just real quick. Does your new power supply agreement in Niagara Falls come with a commitment to restart that facility in the near term?

No. No news in that regard.

All right. Thank you.

Thank you.

That concludes today's question-and-answer session. I'd like to turn the call back to Mr. Larrea for closing remarks.

Well, before we conclude, I would like to first reiterate my sincerest condolences to Phil and to his family. And as he has to announced his departure within two months, I would also like on behalf of the company and the board to thank Phil for his many contributions. During his tenure, he has shown outstanding commitment to Ferroglobe, even under very difficult personal circumstances. We have enjoyed working with Phil and wish him the best in his future endeavors. And that concludes our Q1 earnings call. Thanks again for your participation. We look forward to hearing from you on the next call. Have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone have a great day.