Century Aluminum Company
Materials · Aluminum
Structural: Only US-listed pure-play primary aluminum smelter. ~700kt/yr global capacity (Hawesville curtailed since 2022, Sebree + Mt. Holly + Grundartangi + Vlissingen operating). DOE awarded up to $500M in Jan 2024 to build a new 600kt greenfield US smelter -- first new US primary aluminum capacity since 1980.
Glencore owns ~43%, takes majority of offtake at market prices. P&L = (LME aluminum + Midwest premium) -- power -- alumina -- carbon anode.
(1) Section 232 tariffs (25% on imported aluminum) re-shored to 50% in 2025 -- structural Midwest premium tailwind. (2) DOE greenfield smelter doubles US production capacity; $500M grant de-risks capex. (3) Aluminum-intensive demand: EV battery housings, datacenter busbar/cabling, grid transformers, defense (F-35 airframe), packaging reshoring.
(4) Glencore offtake provides volume floor + working capital backstop. (5) Iceland (Grundartangi) runs on geothermal/hydro -- lowest-carbon primary aluminum in Europe, CBAM-advantaged.
(1) Power cost = 30-40% of COGS; Hawesville curtailed in 2022 when KY power rates spiked. Sebree + Mt. Holly carry similar tail risk. (2) LME aluminum + Midwest premium is the entire revenue driver -- China overcapacity caps upside. (3) Greenfield smelter site/power still TBD -- multi-year build, capex overruns typical.
(4) Glencore ownership = related-party offtake risk + minority overhang. (5) Highest beta to global manufacturing PMI in $XLB.
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