CENX - Earnings call transcript Q1 2021 | Century Aluminum Company

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Operator

Ladies and gentlemen, and welcome to the Century Aluminum Company First Quarter 2021 Earnings Conference Call. My name is Bethany and I'll be coordinating your call for you today. [Operator Instructions] I will now hand the call over to your host, Peter Trpkovski. To begin. Peter, over to you.

Peter Trpkovski

Bethany. much, very you Thank Good afternoon, conference to and welcome the call. everyone Chief Mike joined Conti, President and Treasurer. Shelly here Finance am President Bless, Senior Executive Officer Vice Harrison, today President Craig I and Officer; by Century's of and Executive and Vice Financial Chief prepared our will questions. take After your we comments,

with presentation available the our as disclosing information about website means a a www.centuryaluminum.com. We As of is reminder, at and Regulation for complying company today's website on FD. use our material

please X, statement respect forward-looking measures Slide Turning the moment cautionary Mike. statements With a financial call to review the discussion. hand take shown to non-GAAP I today's here to will contained to that, with in and

Mike Bless

could And please. all Thanks, thanks just joining of to to us Page for X If Pete. you flip we this afternoon.

start at a have our supporting various just not, of I'd the Before the report. our sustainability of point efforts Hopefully it's you go this review most on up If quarter. website. had our provide on overview we chance like on to business. through brief our sustainability advancing the to of

have to a when a couple you encourage moments. I So have look,

highest safety First, this well familiar on who company will the and those our focus remain have of with long followed priority. our and

the to great lot forward. go returns Our enhanced a now and you systems engaged the are new safety all have progress in really to We'll more leadership has Corporate early Safety and as Director plants made US delivering our encouraging. reinvigorating processes. We're report training we to

our In efforts. addition, decarbonization various on progress good we're making

that regarding and customers February, reported with discussions to multiple in followed we our potential Hammerer signed Natur-Al we back Industries. low-carbon in product recently we're As you the agreement with

European adding capacity with discussed much green again the closely very Grundartangi this billet billet. desired provide us as and addition, looking we're would allow development In market casting to at we to

as interest from it. investments also processing incremental increased billet. customers scrap to we're Sebree good their Mt. at the from recycled content capacity. capacity to Holly Holly made a on we We've a adjacent at for I'll be moments. and the process third-party finalizing also made Mt. enable you by will field terms for Sebree plant couple the as We're to at As in in market closer us to well we recent its progress turn just And know, we looking seeing scrap buy talk now looking full solar as to about Sebree. constructed that that

levels points offtaker thus look for As some we this a us reminder, contractual line, we'll points couple are environment. the intend let of now for in me especially are current considering the Conditions with But my when context. pace a the multiple put Stocks going will stuff exciting to couple a you've data. seen just pursue structures. investment. pre-COVID sector minutes, similar favorable are for historically of industry on China points. the at the sole Global detail and to multiple just rest the and vantage enabled vantage [ph] you updating and into and regularly. as that's now Pete of In including is on we falling really provide be their demand. inventories This to of of exciting lot make comments remain forward Bottom tight

economies. capacity of watching than environment pandemic market in continues potential developing we to We're Forecast closer for when obviously the couple supply The side. metal abate price quarters especially potential as balanced for additions. next consideration upside global provides the basically current of an the

Inclusive will by a We've seen that research Government's the lessons than we Central industry do edges. the others. policy driven likely that world need have targets. either of discussion We we of added. We closures net new that most shakes the decrypt have in However or sale past. projects. small to ones believe think perhaps provinces it's will agreed climate to the data is development unlikely very shift we that - been western give their point we obviously capacity to goals see just a we'll learning exactly believe moment. these in more Again, swing to They're and reporting Hard the Goes confident we're this market data. you But Governor contemplated. additions is legally of puts think the but factors the China, capacity being major note is at capacity not emission in currently all before some around remains are above and at if raise in the some this that where this without put out, look just be saying, balance be China. months or announced would that do Pete some likely

Just good examples. to couple progress on operations last the to move the give on, during made just months of you couple we've

back suffered up loss stability achieved caused March and we two One the some days weather and equipment. to to also we're in and and in very remember, equipment now completing get sales offline voltage the during process to the in operations. the to of the in the early resulted maintenance That of return mitigate and events further all of stability. major to We're full with freeze long-term sales failure plant. February you the we other stability to some by in importantly and in addition, April hasten risk number some As Hawesville high line a of online, providing production further December. some plants was, back bringing was the These issues and key projects cold at last took

that as state the and of on Hawesville great the good Xst investment plant. Santee got XXth labor as April. extra five-year reached commenced we're stability training for and by the Mt. ratified at the workforce and near-term some just by really agreement well board We've April, on is power union Hawesville membership contract in said the approved of effort at potential by group. local the schedule Cooper At new appropriate of skills provides Holly, the encouraged contract is this development, that also young by the require contract was with the We authorities the

three-year XXXX and billet reminder, back capacity to into work to quality the Santee on plants' opportunity the As to also gives it structural deal Cooper a and term power of much us the the some gets the needed US alternatives market. goes end chance supply. high XX% the build back us through very of gives It with longer

back of As will you forecast time remind a for reminder, as as billet supply. This production the Holly - sales and and have later when about this is quality the rebuilt coming we Holly at this process a sales XX% to we're see the so it's are capacity we've spending Those of anxious robust. is need in some schedule excited at to know thus reputation Craig since market high for We're really the you talking time quite rebuild. customers entire Mt. the a been underway no constituting convinced incremental production producer demand well that be well on know bringing Mt. XXXX been incremental importantly and year. for

market and to to Holly's and incremental deliver currently capacity obviously. we that's more the as being production and prime buying Mt. the melt quickly we possible. opportunistic production some hot mix we to to to have, up have year, metal as As And scrap primary metal with billet owned begin than we're casting in ramp gear order

came in take debt Craig also weighted the into to won't The of And quickly refinancing, obvious cost capital. was you near-term increased current I the increases interest through very any the with company's to will here. linked so the lower in Lastly, average with company's cash liquidity. and go specifics expense recently detail completed rationale maturity the its

Of has Craig to moment. I'll on recent will improved quarter we just quick this give you prices our for look coming and back industry. flow market Pete metal course in in the otherwise QX. give - the it And in for at that, with company's This a to and expectations realize a put the cash begun began detail

Peter Trpkovski

move the of X% quarter down of X% up XXXX to comments Global last market. XX%. global Thanks compared the up aluminum year. XX% growth I'll of first as on couple to XXXX, world, quarter the pandemic first economy. global was X, onto give XXXX we can same the when of China begun to Mike. of as compared the demand first demand China up in has in the Slide quarter saw aluminum In the slow we and In was quarter production saw we excluding the If

last However But year. production last saw and China the growth China supply X% sequentially. We period less growth the global world, X.X% no supply saw growth sequentially. the excluding growth was year additional period same than sequentially. growth same versus In we versus XX% flat supply in

in be fundamentals stock forward. to global growth looks The around supply with As aluminum market demand projected Along continues reported the levels. going for to is inventory aluminum now to strong The by world. to volume XXXX. levels pre-pandemic price outpace balance

Okay, please. turning to X Slide

You a and approximately high per price pricing $X,XXX in $X.XX here. can $X.XX increase ton pound price approximately an or up average regional record which per US Europe ton per are over $XXX premiums on major cash per for ton first Midwest growing ton improvement LME for XX% and Currently, in approximately spot per Prices per up LME ton first $XXX sequentially. pound per just the in $XXX LME of the was The the per tight the quarter, sequentially. sequentially and per in XX% at or averaged $X,XXX Current $XXX approximately is XX% US ton. price Europe, supply. or the quarter of we're premiums three-year ton. of in high $XXX demand premium In

ton. US billet also also value for Craig. And of per an is over spot $XXX prices example pricing here approximately Finally, with the highs record call the to to that, at are continue added products hand improve I'll Midwest

Craig Conti

Thanks Pete.

Slide shipments higher prior about X. consolidated prices you delivery first take Realized a And increased versus basis, driving On substantially results sales. as XX% in the a net lag global of quarter-over-quarter. turn LME result sequential Let's premiums flat quarter. quarter to for through and I'll increases prices were

adjusted a results, million operating $XX.X In $XX $X.XX facilities. of the million end of and for $X.X Sebree had a and the million $XX.X loss via for million end share. by mix This to million impacts a at value of the EBITDA quarter or adjusted loss cash at were Looking the credit $X.X the of $XX of the million and $XX.X of QX, April. was adjusting amount we million was failure. million of an contracts, for forward items net realizable historical Liquidity $XXX inventory, net increased the equipment unrealized

ton the was ton period. or up or $XX forecast last $XX US up LME per realized $XXX we prior $X,XXX Midwest quarter. same the while our greater ton $XXX ton quarter call, ton per versus per of per alumina QX than per realized on prior per up As ton was premium Realized $XXX over

As lagged in priced the pricing contracts of majority LME the realized alumina we line previously, reference track aluminum discussed trends. prices with our and are with largely will an

impact of of Holly spike As versus at $XXX and of period. drove expected, globally. a market February $XX power per price and expected. production the the prior stock came non-cash largely EBITDA per occurring Realized the non-cash was related sequentially sharp versus by quarter. XX% This slightly was end were in while $XX by and primarily pricing prices accounting impacts of negative than spending unfavorable volumes $XX ton $X million ton These vortex lower bit up reduced as about or forecasted million QX the drove very driven Mt. price coal QX of same polar compensation million EBITDA lower quarter. domestic reduce at mark-to-market driven the a over results

Century per negative On March, linked increased share as share linked During of price on about and to LME long-term immediate the totality impact first began causing QX compensation sizable mid our non-cash to impact impacted to moves our the $XX as market balance, are XX% quarter stock roughly escalating was a Coke however week in the last EBITDA. well. the favorable reduction the power a over mark-to-market to plan.

LME or normal alumina $XXX $XXX be up above the quarter. by QX premium $X about $XXX pricing be Looking to to up ton increase per up ton alumina the ton to versus lag Taking ahead premium QX the about per is $XXX prior European the is premium to is delivery ton EBITDA ton are expected quarter. per and effort, or expected and books ton ton versus be expected Realized we're vortex realized delivery US $XX is behind $X,XXX us, expected realized pricing per per Midwest a seeing versus specifically, at per the prices. ton more or levels. $XX million On $XX up first million versus per to return cost, to level. $XXX of The QX QX to LME power seasonally QX per with related forecast spike QX polar

million power we result, $XX in expect increase a prices EBITDA As to quarter-over-quarter. $XX QX a million from declining

As we increase an QX noted late cost. in in Notably I petroleum coke in experienced earlier, carbon prices.

$XXX expect prices EBITDA ton per $XX ton the a be to $X per coal prior We QX in quarter. realized or versus decrease greater QX million driving than about

to the year restart end Mt. and continue we Finally, on Holly make on significant the in the progress equipment fix issues Hawesville. a

we previously, these million together versus $XX in linked about by for to sum, be of increased be impact million $XX approximate QX will partially QX. As million. expect EBITDA projects. quarter from The of In increase will investment levels. taken offset these QX $XX net EBITDA all discussed production prior of in This decrease largest of items sequentially toward project investment we is spending by incremental our quarter will both reduction

As we've current and we in various manage exposure prices, in past, support commodities spot entering support long-term the largely discussed time-to-time on investments our Based to from contracts. our by income. a below EBITDA for expect million net the in quarter on and will result million be realized a we QX. various geographically to This impact $XX will hedges $XX loss adjusted of

continue this to quarterly out basis as impact market. We on call

In a vast we'll quarter Mt. build related to of for of rising on million by started and A for restart sales payment. quick receivables look in with cash and our the vision, with outflow million. million XXXX. and was will seven-year was X.X% QX note the normal work. mature Mike due no semi-annual in which effectively about refinanced to at majority also it million diluted shares we Let's and support CapEx increased a notable higher to note we flow. March mature $XX beyond, early was for due executing Working additional interest $XX and and $XX million modeling our modest which in $XXX convertible include a our April five-year in to seven-year, gears enhanced liquidity important to be Holly's $XX Shifting as $X turn driven ended Slide note From X.XX% XXXX. new you as We $XXX few QX seen, a have million $X capital further in ongoing onwards. million for take EPS from million by LME outstanding inventory prices mentioned levels the cash the to may outflows to from included XXXX in standpoint, Century X due at XX% quarter mature

continue old Mt. in the and $X $XX standpoint, convertible annual operations basis. together While solid million we an an of adding standpoint interest new restart. accounting resulted new the option, at we either fully versus note will method diluted million $XXX can shares settle the million savings ongoing to Holly on reporting From our this the note. of our convert capture From cost both in require progress the interest and make

we million about us the X.X over to to will next two years produce $XX tons year. about As capacity or at allow a the two, smelter course in of completed will bring invest of XX% to three be XXX,XXX the operation will line project a This phases. per reminder, which

continuously of be we'll invest This expect one, of be XXX,XXX we $XX legacy XXXX ramp we'll about of about capital year their the X.X beyond will deployed be XXXX, of capital which the By will million greater the occurs restart Phase total will in over which as outflow spending will phase which end begins the full be operating line half For of XXXX be through components complement. and quarter about up useful Mt. remaining running $XX two lives. XX% throughout XXXX. build million tons than and Holly second facility. production

We be to year expect level. ton and XXXX around per production XXXX XXX,XXX

at like current like some I'd today, for Finally second on Century what will provide look XXXX of to half spot prices. perspective

detailed At company. of from good and Pete reduced by key cost provides and session. detailed concludes above question-and-answer capacity levels. adjusted second industry for refinancing look to of $XXX over revenue of spot in favorable begin spot the the our our the This call Century's EBITDA and last earnings XXXX our thank remarks at ton to Using pricing are ability busies $X,XXX cash a our about the like time both half prepared and Century add for LME and to ton conditions per a - the the of the cost you for turn the US attention. the power the spot As current in interest will XXXX $XXX Bethany flow. per half our generate only Midwest at million Mike differentiator on premium and to million is earlier, I'd second $XXX particularly back call your

Operator

the Gagliano Markets. first your David, David line is from Instructions] [Operator open. question comes from BMO Capital

David Gagliano

of associated that with before after is hedge of after telling number and in if just hedges that Is and There's them, or and a so hedge helpful, comment of the on now last would have before And you place, of a the those I XX-K number? Midwest say just free the only to were impact flow could about for And terms things it You're million? little hedges? more - and second disclosure there, as out half, information a was call. I LME know I the you on the guess in think. is cash some just of was Duration hedges But flow I try $XXX on referenced and quickly, cash going the hone put or that's on pretty lot I'm hedges. I a hedged the us give passing when both in much some what hedged - in kind couple the of that how very premiums? of

Craig Conti

Okay, going half with question. to the the first back David. I This start and to the beginning. is understand Craig. we'll go I'm then

Okay.

So XXX to the call, company of XX.XX half Midwest EBITDA when the XXX so in we at that premium. the for for So today, same look spot we XXX page cash. and of that's on to overall we're that's again just second what said the of total LME, back of Right? prices go

David Gagliano

Free cash flow?

Craig Conti

To hedges. flow, answer right. XXX does cash impact recommend of the question, Free to really that your include

think go be Now when you sensitivities we've done for appendix will We'll do, use about the how sensitizing forward. when cash. which losing that you putting only our think back which to for and about we EBITDA, go you also business of commodities for - in allow terms to

the could what half So impact with sensitize make. to you any do year, second that of you assumption for I start want concept you is gave that market you and for the would just the that

Now the let first me go back question. of part your to

will it it Q. in correct, commodities have in about You're and about. the we our what doing we're talking disclosed there again talk be we're three is for our K we When that company,

four FX, first LME, if this I guess well I explanation. include in is which The will you

LME, got got got got Pool Nord Euro, you Midwest premium, you you So right. and the then you've

hedges last LME our sporadically in done of loosening the that. that So our year the to Nord linked cost We've talked about an support contract. over doing LME primarily half. to are Pool We've

part that's So the one of LME.

also price. well. that portion. do part, link alumina's we the the buying, those take second and LME a talked of LME about the LME when aluminum forward, selling the an and We LME as fixed to - The synthetically would cost then That's past in is we selling,

the XXXX LME, course Holly of to of on in talked that's talked we side call. at Pool XXXX. Mt. that majority we then other LME last Our the Midwest for Nord that is about that predominantly premium for the what view restart we about support of of And

Mike Bless

of kind the that sort net EBIT. hedges course redirect. EBITDA CapEx, to comment David, XXX flow its as taxes interest the half me down is you The Iceland, of let amount XXX is cash being prices and Mike. of hedge in just free in normal spot that rest flow. half But A; that fact add free your maybe XXX on walk stuff about We'll and about comes helpful taxes cash expense, let Craig delta down normal. one the other point there. we that second from of between to in it of the pay of US, small normal It's

Craig Conti

Mt. Holly.

Mike Bless

Holly all spending stuff. Thank that you. CapEx, Mt.

Craig Conti

Those call about we items talked items last same at those That much pretty same that round in the level. you? were help to up, the that the

David Gagliano

helpful. Yes, it helps. Thank you very It's much.

drill on LME expense down forward, XXXX bit and according to of Midwest fixed further. guess I XXXX sold and the LME I on through think through Just contracts premiums little tons extend I December as and at XX, on XXX,XXX XXX,XXX December contract XX-K then, the December pricing XXXX. tons a see premium those Midwest

have few obviously is, question is year that increased this of it's you the the the April how out years as hedged expense or so we'll flow hedge in now out positions my for numbers get May, March. and versus there. hedged the to they much next So whatever? those are what continuing for But do How and now are disclosure through years? So and

Craig Conti

and part to me go to Let the Mike. the forward over on second first I'll to maybe turn get part

difference came We it. the vast XXX, for Q was restart. hedges. Mt. little start But the sold the Midwest number that premium so So Midwest of in majority premium premium, for that again their correct when see at and are bigger But off production. with we a the looking maybe you'll LME a Holly let's between the was Midwest the K,

we for that back to basis. crux the Now on let's those sold up reason physical is, I more The is we sold forward the LME aren't why when numbers LME think Mt. Holly question go that the and to the protect investment, the forward similar? of

our to book. of going outside that's transact hedge So

it little of that's bit why there's appears So there. a mismatch

physically for in in not Holly that captured sensitivities captured Mt. going is and sold to part the EBITDA already we So hedge for the it's book.

Mike Bless

question, in infer Again, a your perspective David to just maybe on basis.

described Mt. I that he hit the mean spend. protect I on that it Holly a think all hedging that perspective stuff basis. Craig

anytime last selling the If But year just Craig did most a LME. COVID additional seeing for certainty. talking for we be be if that we're sell going We was to of likely land to been [ph], some a going them purposes in described the sort we've can quartile Nord to to perspectively that time. Midwest also about the cost same such, power relationship Slowly percentage mean power going LME or as Pool second then book we cost, when price to gradually better the LME. prices can to thing power we but on do continue and of and that price we a we're ala It's side.

as told set for before, ala basically Although in XXXX. has you Craig

David Gagliano

Okay, else. I'll to turn somebody it over

Just total is there much of planned just if give go you relative a you way as a I can your quickly, really forward? hedge framework percentage just to of volumes to how

Mike Bless

That's to amounts Pool you're Nord that a a position. aggregate selling question. and a don't lot Nord - of In Pool tough metals the create whole not the

Craig Conti

on But hedge the XX% talked for about Nord we XXXX. time, that's Pool obviously last

Mike Bless

mating the It what ala that in everybody says kind of fall season not API to it's kind in kind is contracts of during if ala there. are that at point depends any what On tough of LME negotiating where and time. Yes. and all answer pick contracts the percentage like alumina and stuff. XXXX and the on the this much That available, looks market

just so of on what's now I what pull [ph] we books and here. David right and contract ago. the talked have sorry I finished vast you about documentation minutes we definitely we in In about Mt. to one know hedges majority just then and that it Mt. to Pool it Nord couple talked have it, in new for frankly don't on of with so other that transition before know and for as alumina, when not the said it consistent enough. kind been you because Holly comment mean, or you we get as that new thinking whether signed that mid-ish were might relates question real Holly. period before Just December we the I to sometime, full do a then contract your put guys, seeing and answered you're Around about we as on. if were wouldn't up I help kind know Craig and

lot framework your might gone. pulling kind that's a got in. laid So be that of He LME

David Gagliano

thanks. Okay,

Operator

line B. Lucas, question next Lucas of from comes Riley open. your is The Pipes Securities.

Lucas Pipes

level Lots spite of stab of you kind high a us for sense Could view that, what for premium. look those and cash if discussions. was look I think give and the you another I'll proceeding moving XX a EBITDA XXXX. pieces there. I of of Midwest for like and [ph] flow try it would in out XXX maybe kind take just assumptions? pick LME real to would with to XXXX

Craig Conti

will Yes, so to talking we It truly cash hedge get When be about be you when EBITDA I the different would relatively book. think easy. flow especially were XXXX XXXX.

you year very that we with going that's work can So that, for capacities very EBITDA back the of average you Hawesville a But restart I at running half near Holly especially wouldn't in have If double this today. we're items of Mt. and attempt [indiscernible] running in that. I think give XX-month using XXX well Lucas. your our will

Mike Bless

agree Craig's comment with in would items other is I Lucas, Obviously better. subject the that's like coke starting the prices, get point, it small potatoes of I in thing other generally note that things. to grand The scheme

The in K, most I say correctly is from to the other hedges English. Midwest Gagliano that the the XXXX. and disclosure majority the I'll the LME of the the XXXX it David cited, EBITDA much impact in be vast as said of between Craig just plain chunk vast because of and come The big will majority cash flow. in of and starts difference say should thing is less off in

cash and there hedge the up meaningfully. EBITDA flow, delta system between by that delta shrink is So the produced

Lucas Pipes

what the the in guess I trying EBITDA flow to and with would of correctly impact EBITDA you what at is, helpful. look hedges I hedges I'm That's get both trying like? so I'm at and if flow cash reflecting cash and world is, are understood get what to the no

Mike Bless

line is bottom the what we same. the now price we is just answer contract. you the irrespective the gave of what talked But so where, is just answer. right Right, fixed said, Craig hedges about the That answer what reflect

where in EBITDA”. call “in Let's they some reflect

Craig Conti

Right.

Mike Bless

loss of Meaning contract. cost gain go or in that, they sales forward in in through some sales are

Craig Conti

Yes, walking revenue point will piece. line I think hedge right the you my down that from just comments double total at gave the cash is, on Mt. go at there. EBITDA impact be and Holly most this if if the will, you But earlier hit wouldn't it that would all that through the look

to XXX,XXX. premium, all the help? though LME pathway. contract. is, then size the So that and about we about hedges to that through the think Pool and hedging LME alumina currency that those timeframe LME, EBITDA. will our that then that settle majority side gave because in that's forward of about that Everything of Nord sold be Pool itself of the think Does We linked those year we Euro course what about talked other sold the Midwest this through in we of and else forward XXX,XXX so, the that talked a contracts become for will getting I the on what Nord XXX,XXX Mike tons will going

Lucas Pipes

cost? I'll of Any in just wanted regards to now. medium Obviously, has Alumina regards and I to LME get the keep Thank your definitely very impact alumina be my and more would pricing that's and turn question to current format, we outperforming on evolution price thinking strategy. appreciate perspective much to think recently your long-term to is it. it alumina helps. second That been that. alumina. you

Mike Bless

hope Mike. a question doesn't and It's you, is, I great sound Thank the non-answer Lucas. like it a That's is. answer

one, you perhaps of answer. give sort of a first philosophical and a term short-term sort me Let then answer longer on more structural

upon price caused in then to depend LME. between But necessarily the it's the percentage had to September, really divided current certainly market. by October. current some conditions that - LME direct short-term influences API don't it, contracts the reference going market to relationship It's it reference So

the evident we every other being sort equal in the normal We business. see capital whether rest this percentage have, fall. to the all This the given a our run but basis, when company right very risks influenced revert the our of the to and business way growth be way underperform running that or the we'll like more so longer-term just participant that And company struck opportunities, The LME we LME to in contracts are that way run alumina on conditions face to not heavily the mostly your opportunities think we alumina right by company. if can believe of all continues of size in this relationship. still company structure. are market is that basis, balance the each still the that On of saying else appropriate year all fully whether to big to a

Lucas Pipes

what kind still into has alumina, EBITDA. this my And they outperform commentary aluminum [ph] If Would that lower. of of this will looking get double higher fallen or the continued be be to in maybe would Maybe accurate LME fall by to at level? million area back question. prices $XX you as much

Mike Bless

I sound would like if It's But then, Yes, be still it be that's apologize prices I all applicable. way balance alumina yes for our API of price if decision. opportunity. Again course I guess hedging which we correct. heading contracts a advance. great you're to and not similar to in It were we where non-answer risk think If a about were could like is, were of nature. question. it It's any is answer fixed upside. one but

Lucas Pipes

have decision again. that make flexibility to would you the once But

Mike Bless

I'm For That missed your sorry. sure, question. Absolutely, XXX%. yes. I

Lucas Pipes

I of Very helpful. all luck, you. appreciate thank best color the and

Operator

is your line from John, John question Your from next comes Tumazos Independent Research. open. Very

John Tumazos

in us us could to an raw doing expanding picture you, be or are? people priorities materials adding reduction, seemed give although smelters, to debt tell idea Modernizing wonderful you power a US or expand building for with or big solar the just response new priorities what your smelter trying From Iceland? alternatives, of your

Mike Bless

it. Thank We things in expertise. we you very choices you and there enthusiastic but tag as smelter a come we a John will or new that are, at kind that the or overly prefer apology, of scrap not for folks we with have opportunities, the the in running just quickly the yes, look be where It's processed even at be installing we out the with without what are fraction metal to our capital price really smelter the a when market. building, structure i.e. value-added cast from sounding markets jargon have our Building bottom risk. markets really with much would lot it new to very are to have build into those of content case green of serve, today - imbalance put hot In or you and know of we product, our we we for and We that let appropriately pot customers is list. general of the interesting who and how line the products of on expert green and designing specifically maintaining, fully believe I'll of doing. opportunities a use new

that's so we and you're opportunity large Sebree. think were a hearing to customers Grundartangi markets, why about demand our for and at opportunities product Holly so is that talk only is and that grow time. convinced this And at us interesting Mt. at and Opportunities the of right very going kind

to structure the we've that think right the in years got up next and pretty point your for serves capital well. five the of I sort to seven place maybe,

the to last recently terribly additional of can we maybe that Holly would and hopeful you way hot that, not it know optimistic distant that then, we the that capacity add we're In back contracts alluded your purity with a as right XXX new eventually power XXX% coming one the bit. the modest scratch to on little an bordering to you only some can incremental our of if [indiscernible] just fifth there pretty that my But megawatts on looking just line a back Mt. at Hawesville, And is - bring to power get find do to bring first at stick back answer. on. a it's to one we that's future terms easiest have investment. now, I'll metal meaning, smelter know

John Tumazos

and green in run run want assets. current your to you full So

Mike Bless

I like it. side. We're TM. the We'll writing that down now. Maybe we'll put that left up on you give the

John Tumazos

and I So I'm Mike, another long-term. ask can back if thinking

was at or I at IPO the think XXXX. [ph], when DLG were on we co-manager XXXX I

Mike Bless

pre-history. That's

John Tumazos

Nasdaq. oil thinking shorts moving Century XXXX. around It was he that shorts. Gillian [indiscernible] you XXXX, metal internet in I'm down at on cover spikes was your of There's March peaked and $XX that stock market. Robertson market, $XXX.X him when crude the and at same in covered his peaked aluminum commodities July hero to the should day, ancient LME killing firm around when $XXX, were shut the XXXX his internet times My short and different would crazy in

Mike Bless

sir. Yes

John Tumazos

how I you peak don't a aluminum or to fair little the the comfort aluminum issue that of week I to this shorts. And your shorts to have us know the it's blame going the to covering don't that could market of market details bit in equity. contracts many about give not in covering and to top have some a XX-K. isn't by make care you the but going Century you're

Mike Bless

the That's has or that easiest anyone you question answered.

comfort yes, yes can give full we you a straightforward I give But that's think history. can you [indiscernible] straightforward, and no. we there. a give we can or you Thank yes, that which to comfort.

John Tumazos

money or So of out not some to is to close it your tactic shell out hedge a you're little bit contracts? going anymore to

Mike Bless

And of second got I talking think tactical create day absolutely, around don't sell first out to to on I'm not for eventuality, that hedges as to or something and Holly wait. But the wait you I math. about Mt. a long. the first structurally. close sure and do long sit we European you price you're should thing, not fancy have that's LME that word. think said; would all anymore power we expect not We we hedge was quartile, I that anytime that's lot

John Tumazos

didn't positions just on go away? you hedge all it would be erased you new would delivered, If you book and When just your delivered. when right put now? If

Craig Conti

is out XXXX; tail is that answer The This short there is far a small for LME. Craig. goes that

Mike Bless

Very small.

Craig Conti

Very tail. small

Mike Bless

With be a next in stuff and Pool. quarters. that vast Nord is the majority of must just is majority it mass of it it Its gone potato, - small six

Craig Conti

Yes, right. that's

John Tumazos

they'd strong in GDP near all and have X%, in I'm are blow the concern interest over my of to Mike, knows they graded the debts the But is biggest rates. if who just it's worried near someday broke. So to that's everywhere going because when paid politicians to fraud keep things simulating and that the But going all being down go them in but and zero up. too are markets be? term they history about

Mike Bless

and obviously. can't Yes, that's - - John mean I apart I pieces personally pick

John Tumazos

right. short, a right it sometimes and you're do conservative. you'll be year wiped sell by out you you're early going being before get to you We know But if

Mike Bless

because not our the beauty of market production here that, The vast going that's is to majority of happen to exposed prices. it is

some enjoying got of So vast we've majority we're downside the that yes, upside But there. protection.

You see it in.

John Tumazos

the at looking moment year XXXX was I stock chart [indiscernible] a ago.

Mike Bless

that for history. Thank you

You've I got I've XXXX. got that history do. more only Century back to

John Tumazos

your be to great thank It's friend, you.

Mike Bless

thanks always. John as

Operator

have [Operator David go question Markets. David, Capital Gagliano another from ahead. Instructions] we of BMO please

David Gagliano

million off second thing. of also XQ. some to the just want there the in $XX are $XX a A I again. [ph]. to I and first follow-up remember based versus lot near-term I times by increase My quarter of on - really question takes net sort for calibrate obviously and hedges clarify puts do too million have the one But sell way just those XQ. one

what's is that play these out trying one-time in the minus million starting the are talking XQ, it point So or to from about you I'm really for happened $XX XQ. right excluding

Mike Bless

That's good question. very

Craig Conti

Yes, going anticipate, QX that's happened. is about the a we think I you and in what actually couple know The great question. way of until last that what happen QX days up to what's in

there away. non-cash is go So going one, to that mark-to-market were of Number couple things.

is $X in there. So million that

stay. But happened one. number going that's think other the things I that are

cost those, talked think I is linked stay. going power about LME to we

end think in power is that prices. seasonal Vortex. of QX you're the only piece the seeing third that I top on of you're the second quarter for coal trend getting Polar $X the then a So another that was that absence days Where view And something accrued in million which QX we time. continually, this was so about expanded $X which has that prices. really has to are $X very, million there of QX emerged saw million very Right that

Mike Bless

cash with mark-to-market Polar it. Vortex that likely bad aren't right. of and down just in cash was things QX. share those course There's happened Dave, up pointed repeat. counting is you're or Craig no there There to plan and some

going some your there's taken. well things point way. a maybe at is So But

David Gagliano

$XX to point. Is what heard it to just the I'm I'm No, million. minus out, I I trying make not a understand $X figure sorry I'm minus the still don't it. million? is, of trying answer

Craig Conti

David. I'm sorry,

David Gagliano

QX. [Indiscernible]

Craig Conti

We answering were something different.

Okay. Yes, with we negative absolutely would million. $XX the start

Mike Bless

Yes.

Craig Conti

pieces all the build we $XX Negative increase through gave there. you to would I XX everything out from be million XX that about went

David Gagliano

a then and Okay, hint. just Perfect got thanks it.

mean. come back I Sorry to I But the I guess hedge. whatever philosophically

You I mean hedges and means. it sort quartile second could aluminum know what hedging what about first, don't that frankly LME for and of talk and

on kind So hedged forward a just aluminum a you're look I you'll question and how be hedging what do like of framework, asked me tell rolling much on thinking about any? Again Metal but volume can you forward, if you LME? just basis? the earlier think

Mike Bless

at Midwest right the years. very is Midwest now four mean say, totally different. [Indiscernible] good. that's I really limited. look would we I But

Craig Conti

Limited.

David Gagliano

Okay.

Mike Bless

- small. alumina, very converted you have fixed only that [indiscernible] time fixed price since you only if price it's the contract LME, is our on On achieve LME, - alumina so

if Same Nord contract. I Nord the LME mean were a Pool and so percentage thing price on So convert to Pool. very you small be will power those ton. LME

thousands. I for and right the in quartile, more want contracts the one was Mt. now done the vast First majority the time, of say which tuck-in tens stuff of second Holly. to books [indiscernible] small into and those emphasize in tens

David Gagliano

Last me, on XXXX. XXXX helpful. and question thanks. total That's Okay, from CapEx in early read

Craig Conti

$XX total that Holly. Yes, million it's about Mt. in includes

Mike Bless

is? Of which

Craig Conti

Of Right, you say I which $XX take that million $XX is would million. Mt. so Holly. will

XX haven't at Mt. Holly. made another year, take or we really XX answer just let's two We sure made XXs returns XX probably just [indiscernible] [indiscernible] for on to to make to Hawesville Mt. We'll clear decision already sustaining Holly. a changes and another quarter for between so of is, this on out, decision year Now - coming file in maybe. be this view that XX next investment a

David Gagliano

Okay, perfect. Thank you.

Operator

question Pipes Riley Lucas, please B. Lucas have We go ahead. another Securities. from of

Lucas Pipes

that about left and to helpful move to is But go deal a little I as given what's get in expand bit big from on here to asked, we here maybe just if be well. follow-up QX. bridge provided maybe pricing a this the etc.? Dave QX would of But my wondered a Obviously of bridge can commentary. QX from

Craig Conti

now. Yes, Lucas, question. for a half it level I the understand I second would keep at

little [indiscernible] really think quick. bit been and moving more I see that it's work really, return market

third if As It's outlook, you and we cash. place relatively right and to to the good is the you stick know, a level second between stay, little half a ground loaded change can EBITDA it fourth bit gave divided in we for quarter. Mt. I the as more online. incremental two something to Holly think I out and a and start more by with as up. quarter back good fourth finish a coming Hawesville place production But is in comes clarity. little fully There's

Lucas Pipes

it. Got

versus to $XX goes a - something, to it there from it in or So QX. call jump $XX million I think To then so XXX we it's QX million right? have

Craig Conti

would It be.

Mike Bless

XXX.

Craig Conti

be I'm XXX if and half for doing would of so XX correct. quarter. my the is in That It in XXX in the the be XXX, fly half here. math would math third

that about being Back we the second quarter. Given [indiscernible] all else to talked assumption here.

QX. EBITDA is that make just to right to XX from the of be XX clear so is part for reverse this number getting the question [indiscernible] sure negative all adding low end adding The XX of the see back now. first your we to negative The would range question timing. end XX guidance of and from that XX, an

Lucas Pipes

of right. Got best appreciate and luck. it. All it Very helpful. again I

Mike Bless

Lucas. you, Thank

Operator

further in the have no We questions queue.

hand it conclude. to to I'll So back guys you

Mike Bless

in. for a dialog look being months, and not questions. of if great Bethany the thanks Everybody in touch we usual. to appreciate We couple sooner. forward and Thanks in tuning Take care. as

Operator

gentlemen, conference joining. call. Thank today's concludes Ladies and you for this

disconnect You may now your lines.

Century Aluminum (CENX) 6 May 212021 Q1 Earnings call transcript