The rating action is driven by a slower-than-expected recovery in credit metrics amid continued market headwinds, which has led to a downward revision of the financial risk profile.

The Negative Outlook reflects the prospects of sustained weaker operating profitability and credit metrics in a more challenging macroeconomic environment.

The rating continues to reflect Elkem's position as a global player in the silicone industry, strong cost position, moderate contribution of specialty-like products to sales and a financial risk profile of BBB+.

The issuer rating consists of a weaker business risk profile than its financial risk profile. The latter is currently helped by favorable market pricing conditions and a recent equity issue, leading to leverage expectations in the 1-2x area.