CENX - Earnings call transcript Q1 2024 | Century Aluminum Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Century Aluminum Company First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference call over to our host, Ryan Crawford. Please go ahead.

Ryan Crawford

Thank you, operator. welcome conference and everyone, morning, to call. the Good Senior Jesse President Executive Treasurer. and joined Peter President here Executive Century's by today Trpkovski, and Officer; Bialek, I'm Chief Finance Gary, Officer; Chief Financial President Vice of and and Vice Jerry our take questions. we will comments, prepared After your

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

take a shown Please discussion. to review to Turning forward-looking statement X. to non-GAAP today's moment the cautionary contained here the Slide in respect with financial statements and measures

And with that, hand I'll to Jesse. call the

Jesse Gary

and this lots to thanks joining. for of Ryan, quarter We exciting progress some made Thanks, with everyone initiatives. new

quickly the on an environment by quarter excellent with of venture project and improving So results, you our then each from our then I'll strong with U.S. MX performance plants. the I'll reviewing and announced update Jerry joint our will secondary first our recently Holdings. smelter and through new take today market greenfield the of operating details start finish

give proud Overall, quarter. the but team costs performance and will EBITDA details the locations and adjusted $XX full did in of to really the operational our the job quarter. we through across Jerry drove are million here, first safely efficiently strong of declining you our operate

which is made of strong seen improvement all to culture of real our in reflective a safely. have plants, leadership safety operate We have commitment and the plant employees our that the across

from Europe picture prices China quarter Market in broadly substantially strong demand LME before demand in improving the paired higher X. in continued remain first Slide to conditions with Turning the U.S. and notably drove an balanced in demand XX% the premiums evident be over levels. premium in course most increasing as well April. up regional the nearly of with year-end to the European quarter This in pickup was

LME QX from elsewhere alumina alumina QX rose April, XX% up curtailments have in Australia. in higher supply production the In market. prices quarter India a about levels disruptions also during have driven tight with as markets spot followed Atlantic for by Alumina made prices and

markets captive makes acquisition can high-quality bauxite provides like neutral of value us most alumina net that Jamalco the contracts, that Combined acquisition and pricing a of as commercial strategic these, for alumina rising roughly our supply it with In and see smelters. clearly the our our long-term to APAI we Jamalco company. now the

refinery also pleased to Jamalco Production improved say the profitability I'm to at and through returned March. QX, in

on operational to resting achievement, additional continue the Of efficiencies plan the balance year. drive course, not team and we the to this and is improvement through of

Turning environment. global trading to the

over you including global the can of remain stocks, on lows being available with at comprised all XX% vast LME inventories. world of see of inventories X, Russian the metal Slide majority the crisis around post-financial As

Long-term into markets this with mineral global government aluminum, and in flows the towards will supply new aluminum near-shoring Mexico trends new month on U.K. production, Most after broadly, and of produced April a aluminum into U.S. U.S. U.K. this on metal earlier other sanctions and XX. impact month actions strategic including continued U.S., ban U.S. including metals, global that our and Russian to in Europe. the and the U.K. the key import Russian announced and accelerate announced physical

We the thank delivery we EU as the taking this and believe urge markets. licensed of warehouses. the administration Russian step, Western this that approach across ensure would action sanctions and take firmly to right well London like for to to We the a action. necessary U.S. Exchange and U.K. metal Metal into was restrict consistent to Chicago the The Exchange Mercantile further of ability accept

The and new primary value-added Mexico America, announced including PXXXX, aluminum number of a products aluminum of on duty including new imposition immediate tariffs North on tariffs, industrial a products. XX% goods, duty last in Elsewhere a XX% metric the last and on extrusions does tonnes week not and XX% other whom apply value-added aluminum of will year. into agreement, PXXXX on have Mexico XXX,XXX countries a products that with all to including duties aluminum Mexico over countries XX% exported to free trade

While the including U.S. supportive product applicability and full expected not the the reexported of the premiums. details and of are exemptions to yet program value-added be products are Mexico, from of clear, actions delivery

have and duties a In domestic March, the billet the case. extruders in granted of duty an the Commerce victory subsidy second the the impact that pending on Department imports extrusion expect against we continue countervailing case U.S. by demand significant year. of antidumping of U.S., beginning to trade early portion U.S. In positive half preliminary this will imposing of

believe commerce the that to on duties And and antidumping markets. in to countries. the If also immediately to extrusion billet into we go XX U.S. impose duties effect expected would add support additional will continue May, strong and are so,

for reminder, some anticipation second conditions more U.S. and market pricing spot a sales did back of in constructive environment. volumes As we improving half billet a hold

specifically Finally, production. discuss U.S. and In IRS material with Department costs costs regarding Act. late I testified Treasury February, material as add essential XXX potential these the to costs Inflation of indirect we hearing under direct joint Treasury to aluminum at Reduction continue eligible issue, Section the and to the this the of nature noting the

million and would be future credit new amounts sites smelting pro at rata a benefit to our in annual to from an material roughly U.S. from going for a Our ranging in ensure stable participants, production similar the submitted to comments of amount eligible would producers of increase of increased XXXX existing increases mineral we broad downstream direct basis on and eligible our million $XX XXXX production benefit chains. critical the to also industry Any domestic are set or added be ultimately supply If is automotive with including customers, position indirect tax seeking and costs to costs, and companies to line as testimony expected annual forward. for production. additional for recognize our $XX expect and

profitability a our We returned our saw performance stable And across operations. reached and stable in refinery March. to in and strong first smelters operations the quarter. Turning to Jamalco

XX-megawatt that QX energy Iceland, lower we curtailment announced, they impact reservoir from QX will end in the the April, abnormally This continue initially as loss expected May expect by were but previously an and in to until of expected. pack Iceland In has of drive lower to When the the Grundartangi volumes continued they're be to power did end curtailments now net announced included levels. spring is our guidance. experience leading as cold snow finished

month. casthouse we first our Grundartangi, cast at out new earlier of news this better billet our did green In billet

now fourth customer QX and into over the to base qualify before excited to for and European with We're very European commercial orders the for billet natural our key We our production expect sales producing begin customers supplying beyond. the quarter ramping trial normal marketplace. low-carbon in are QX and much-needed

continue picture, in the U.S. by be moderate below energy energy natural the driven out prices a Finishing and to spring prices constructive $X. gas

energy XX well Sebree markets LME, exposure constructive the energy continued make power our uptick the exposure corresponding recent next did months. decision portion Sebree a and metal derisk the as price we price in amount as of exposure small the of to and hedge bit Given over forward a

contractual these through decreases time give Jerry both bit to take material and many in our physical On detail on which of benefits our the to price you price tonne. coke begun falling see $XXX of to with raw raw our have Due results, soda the will metric will material lags, with a below of and some levels inventory imports pre-pandemic we prices bit. more per roll finally side, caustic a

the completing operating potential Finally, production made quarter engineering plans restart at procurement enable good is not remaining Mt. Holly, during towards to we the XX% necessary of the and of today. progress the that

our it's down the with planning and operational cost best to that projects rather these line. the create discussed experience stage to in be rush research and potentially issues the we've As before, than research thorough

will updates significant We of the not for you the that or have requirements later this cash XXXX. capital any over have are on additional QX call we do course summer, our restart that we'll we but for expect hopeful

and QX quarter now Jerry through outlook. will our you walk the

Gerald Bialek

Jesse. you, Thank

Let's quarter a regional first however, the curtailments On to $XXX decrease X% due lower quarter quarter in premiums, X consolidated first versus were decreased prices, sales tonnes, Realized in resulting approximately million, Iceland. to a XXX,XXX delivery quarter review despite value-added and turn global shipments prior power up prior sequentially. from of to Slide results. basis, slightly net

costs, year at X quarter EBITDA XXXX driven XXXX material a credit value-added adjusted Looking million to recognition EBITDA recorded full of the of adjusted was Section premiums. IRA for the lower anticipated attributable period. recognition compared fourth Normalizing million. of operating QX credit current results, to was quarter This which lower XXX prior by in the $XX were timing the the due the improved Century with during quarter, and the sequential energy the by partially of offset Section raw the XXX of benefit $XX product primarily in decrease

During the of $XXX acquisition per bargain $X.XX deduction we recorded The purchase net adjusting the million million. purchase period, item to related for is gain and million gain. finalized $XXX or accounting was bargain the a share. loss $X purchase Jamalco Adjusted the main of

$XX outlook we on of for maintained $XXX accounting, the liquidity between year, at end of million of million million cash Slide XXXX $XXX amortization $XXX you We the can updated $XXX facilities. have million quarter, finalizing XX. and in our result see of available consisting our depreciation a As credit as and now purchase the for strong to and on million

Together, the explain improvement $XX. was $X,XXX in was basis. prior tonne to In per per the for EBITDA on U.S. Slide of a $XX LME and European a million headwind per in down versus down turning first $XXX up of $XXX total, delivery delivery Midwest $X Realized $X quarter of first premium quarter, And to X realized million. adjusted quarter premium while was amounted Now quarter. $XX. normalized tonne was sequential premiums EBITDA LME to adjusted tonne

in pitch coke $X million. decreased raw prices tonne, material $XX in million improvement realized per Power EBITDA. costs $XX decreased Together, resulted prices per tonne. $XXX and costs decreased Realized a by

of will million. including the quarter's in million expense curtailment pot in quarter. OpEx prior be Lower relining identified now last to a that the efficiencies created the incurred premiums headwind than some value-added and was deferred $X $X in outlook OpEx second period, we Iceland addition, better power related

pointed [indiscernible] $XX $XX increased capital at million the to EBITDA of let's cash. with borrowings had relates began I $XX With Slide Capital in million short-term in Adjusted for quarter At flows, cash million, as working $XX contributed $XX we million We look fund turn the cash. expenditures to which million. quarter normal that, totaled flow. Grundartangi the X, We a out of last quarter. to project. X end

you quarter for expectations Let's our turn into insight second to Slide the XX, and some I'll give XXXX.

realized tonne QX or U.S. For QX, of to about The tonne is is LME per QX per delivery per premium premium $X,XXX $X. to versus lagged be lagged $XXX at versus up forecast $XXX $XX is European up per be quarter. tonne, $XX prices. first expected tonne the up the The about expected Midwest

LME by Taken million expected delivery are to together, the premium changes approximately versus increase $XX QX levels. EBITDA QX and

between in a benefit. to about raw our prices be Collectively, power a expect We flat. million range expect to be we flat key to materials $X

volume at to seasonality summer a flat expect be We to slight smelters. our normal given U.S. headwind,

expect a of of related $XX EBITDA considered, range the million we deferred million. QX expected factors to for expense headwind power to $XX All a $XX Finally, from in adjusted in to be curtailment between about our because pot outlook of is million Iceland. QX relining

business the demonstrate at to moment earnings potential a take current the market of conditions. to want I

the efficiencies, As we generate to contractual LME range customers. $XX have lags to LME results rising current with spot through we take to to our regional to of adjusted The and And million the additional market If opportunities due $XX operations business time our simply roll million improvements along the adjust prices only, for add outlook favorable were that EBITDA. to could prices business. provide historically, discussed, work stabilize we've exciting conditions, drive premiums with in value-added would quarterly upside. and done

I'll to turn Jesse. the now over call back And

Jesse Gary

Jerry. Thanks,

our Slide new we X present projects XX. pleased to growth quarter. that this I'm announced exciting to Turning

to capitalize market, which U.S. the is the of One in our the largest core for target position as strategies in the aluminum primary shortest world. of aluminum on our Century is at user

alloys allowing critical suppliers strong in premiums long-term X base, to footprint Both called Sebree production unmatched customer on Mt. towards flexibility for and and and towards trends, electrification from And and increasing for this and customers as base. looked billets our as to leading advanced service green are aluminum in known is in position we to products. our ways products benefiting trends U.S. offer near-shoring production. for Demand to value-added other from Our marketplace amounts well has the have of in U.S. and to to the supply our demand aluminum continued chains build Holly regional and of meet order aluminum on long-term grow customer renewable and mineral close energy our while trends ever-increasing the us Tier these capitalize products.

XX. Slide to Turning

production The as in substantial aluminum first past, more have small some engaged casthouses. in in we've those recycled see foray were U.S. production green a experience, engaged the of Through And of the amounts our for opportunities into to we a the customers existing has production. long is make we us. This billet priority in secondary our for been discussed with this U.S. growing demand and secondary

space And realized this finding find operational would the procurement and key secondary necessary partner thrilled to chain new casthouse operate the to secondary we build experience partner businesses MX entering and of quickly successfully operator casthouse, we be trading a with in a line and expertise supply announced in in we longtime this a in to business. differences were the and in perfect Holdings, as March, of scrap U.S. Given

X our Valley The expertise new to processing with MX, casthouse that Holdings' And casting postconsumer advanced in have found being million-pound values of and a a the is common complement region. people-centric culture. plans set our equipment. we share own. scrap with far billet XXX Ohio organizations casthouse MX and Together strategy are secondary in and the designed cutting-edge construct we quickly

third completion, achieve expect by combined decisions to expertise, advanced make enable performance the extrusion billet next-generation to sustainability exceptional and When investment products. and venture is joint deliver chain supply be will produced technical near customers and a the our in objectives and the quality final work their with Engineering for in our position we paired planning quarter. to

customers casthouse. secondary offering supply of will suite secondary tolling our completion would billet as through value-added potential American-owned primary and well be the to solution closed-loop for in a a joint casthouse The existing XXXX, complementary Upon the venture be largest extrusion by scrap smelters our as products arrangements. complete the chain

August. on will you more call we be with provide to able in our projects QX expect on those We details

Okay.

the late double Turning smelter here last Page plan aluminum to We were XX. green the green build aluminum announce project our thrilled will smelter leading the build supplier The industry month state-of-the-art aluminum new existing in U.S. to nearly a U.S. position low-carbon for ever-growing secure size products. market need of strategic and primary of domestic the alloys our on value-added to fulfill and to U.S.

our secured The value-added U.S. a suite the and million as selected some been for provide new U.S. time. smelter of receive grateful And products of produced we're as part aluminum proud the program. Energy industrial demonstrations source of Department by technology. on quite extremely be to to to up $XXX a aluminum this and funding green project with full primary best-in-class customer base domestic as would We've well working low-carbon with of military-grade in

to confirmation domestic the was selected And and investment the viability production strategic grant historic the of primary extremely for project project. for process is for selection need this our aluminum be competitive. of for The both DOE the

U.S. with long grant will Section production the future. a strategic into tax DOE in generous this this workers Combined that significant to its from that and the metal ensuring made the be critical credits, Biden the XXX industry administration commitment producing has the shows

create represented and our for like expected colleagues and over their at the I'd United is The Dave full-time commitment towards the making aluminum thank also X,XXX smelter project direct jobs. shared ] help green Steelworkers by construction reality. X,XXX to a Steelworkers more [ this than jobs and to United

tremendous one a to this and undertaking years course, smelter will take complete. new that Of aluminum is

begun project, Ohio narrowed location on Mississippi energy work, have the X announcement of River procurement to and site focused and already detailed our As the we've selection the engineering the smelter of on and states. potential Valleys

negotiations, and of of $XXX finalization immediate site of completion project terms grant energy the phase timing selection the our Department and Energy will second supply and engineering regarding million of next Our steps be the completion work. of the with the on

initiatives each proud industry. U.S. on I and helping are projects several ensure to tell progress next these aluminum significant make X we of be announcing these future our the to over each can't we'll call. updates months, how the next of and to expect on on provide We you the

to forward questions call look operator. we'll your We today, turn and the over the to now

Operator

[Operator Instructions] the Securities. Pipes The question of first line comes from Riley of B. Lucas

Lucas Pipes

fronts. many your on progress Congratulations on

you it In in them would casthouse. imagine of this And the could and like a my with the ramps. up. so One And you'll of wondered ramping probably ramp losing Iceland be better is articulate can I facility I year. I production up starting get you the the maybe still impact, fine-tune QX, for if as model you're over as sense money that sounds especially course

Jesse Gary

the for question. Thanks Lucas. Sure,

right You're consisting mainly for of over QX, will customer base and volumes QX limited, Europe. that trial casted our in the loads be fairly

And they so volumes into QX. the QX start course QX. ramp see in full of actually trialed will as will mentioned, come you'll of and out Europe and going the be where be should sent volumes then QX, QX, over most those over in to we And

included structure, in In we of all the cost the guidance will terms that gave. be that

additional be be 'XX. full won't then QX starting significant that. the billet to And to upside of of there start then those for It you'll period. in and So in that see over incremental won't out business hit anything sales the QX to

Lucas Pipes

Got it.

step we that kind QX asset. it's step-up the quarter-over-quarter really to EBITDA, in thanks kind where see would versus up in this of QX, of So not would in big come QX

Jesse Gary

trial really are That's pretty be into There will QX QX, and correct, those small and in customers. just really the but Lucas. loads sales some

Lucas Pipes

in versus QX? quantify QX to way Any potential impact the

Jesse Gary

I still give will say there as customer to in And on just for course, you our period now QX what QX be into that base. guidance of is a sell call. start that ramp-up would We'll,

quarter's volume of hit So substantially in higher in QX, 'XX, QX worth it won't will but that yes. out than be the full will QX what you'll be and of it see

Lucas Pipes

in you that. different new I on many on projects And congratulations that. outlined the your on levels. then the on appreciate exciting first, -- Very U.S.,

like us spending we around How casthouse, in return could capital it anything would And I the will would economics the X paced the share And give wondered you very next over read What's if new maybe for years? start the helpful. could project? I right, you on it On a thresholds that be sense sounds XXXX. intensity? be if the

Jesse Gary

really Sure, We're in you're been portion Sure. long And here time this about also We've of the enter aluminum, we're and to Lucas. for right. for lot of and U.S. Yes, excited elsewhere. business. talking in indeed seeing a about this secondary demand both project. increased Europe our a aspirations the

So good a enter it's opportunity for really space. to us the

existing And think very I closed-loop very as products are to secondary -- of received We customers. be sort both complementary able be going offer full And U.S. all and by it's to it's existing that to to market. of suite to billet primary business supply in customer able mentioned, the base. to our we'll our billet well the we chains to that actually offer the -- because

an time. be at that to like QX. QX update project investment and in do we provide And exactly returns a with everyone that on the hopefully, what decision, an expect expected we the will make we make decision, are that in what looks and do So once we'll position

far on we're to continuing MX and on advanced it. excited on of ] engineering sort finalize the project, with are mentioned working work at [ as one really We partner I But this about that. our the

good it's going think I project. be a to

asset profiles, side. venture, of on terms And able with minority secure will return course, this do is to be high us then, on. small XX-XX, some financing we're in spending an that on profile it very think attractive joint we pretty level of Just and a the

over financing we have much we we're with And so shouldn't project XXXX. requirements looking structures at, of the cash our that side. from to cash will decrease the requirements the the balance And think

course, of So timing. going bit gives little more And we'll, on a sense detail the give you there that forward. of

casthouse. perspective, return talking in return but engineering And then little on getting past without we in specifics, about terms our when we a bit finalized we bit little into requirements the about were we -- haven't the the project, Iceland talked talked work of a

And said there, mid-teens. in just remember for unlevered are looking we we IRRs the

some rest that of just sense we finally, And projects independent about consideration we so the it business how discount the your of business at business secondary And selling forward. then it going one at the that LME scrap customer converting then gives purchasing complementary look and and these you to this in really LME other really like is and marketplace prices our to a at LME is base. because to

our which a from it processing really will business, which LME-exposed. becomes business, rest independent So and margin is be the of

Lucas Pipes

unsecured? follow-up helpful. loan the Should capital Very vast expect either And I a of majority the of just the project-level or on financing. secured

Jesse Gary

Yes. will this expect be We that do project-level financing.

Operator

The next question Katja BMO Jancic comes Capital of Markets. from

Katja Jancic

can talk the a green how would smelter, smelter total? cost about in bit think much On you aluminum this you

Jesse Gary

the clear on as someone in -- really Yes, million needed. This really U.S. when been rewarding the And over you it's we're this is talking I in it's has over situation about the the green X like to supply smelter. that excited years, short. about It's very be XX for worked industry something look at tonnes said overall the for Thanks. U.S., who's call, growth.

federal I the importance supply And level, the mineral DOE got up recognized is the that's national to to really the way a and recognition from grant as of think we that, the that aluminum all chain. critical

process of specifically, are smelter terms going for the process we the your Katja, on focused us. ahead of and forward to In question

site be securing energy to pretty and progress As a that term that on good front, contract. the on so I make also expect advanced far and call, We're mentioned the we portion there. near of selection will in the

for take that really we'll engineering that the will And as sense of out be. able down sense. second time, is a better projects several we'll months Coming of part to much better the you And capital be the phase to cost complete. and that engineering will a that hopefully, what at little narrow total then of give And work a for the work, finishing bit project. the on have

premiums at think we we're environment about shortness recognize real moving the really that that in obviously, casthouse to it's returns. And think ourselves to corresponding excited We're we from we're put to with the it's an and U.S. project. products and them with the offer just close the on going this the to project find process But U.S. we DOE the benefits, our U.S. have the for of the of cutting-edge a in flexibility attractive attractive focused opportunity our with the able with moment, opportunity really facility of really here forward. a the We the grant, them, XXX in market bases the very existing close to customer us. to value-added

Katja Jancic

That's say fair But that it be fair. to is it a project? would multibillion-dollar

Jesse Gary

Yes, it be in that absolutely Katja. range, will

Katja Jancic

project? that very even would potentially someone with know a on I then you Would but early, and is this building maybe partner be this And on -- possibility?

Jesse Gary

with Yes. We're those variety of There looking confident opportunity. as different will we're attractive said, of at financing pretty be items. an And alternatives. I all a

we early what like. talk partner, be something definitely we to think So be did to structure attractive in them. little exactly to about a But a if too we would look that would would the bring financing want that think it's

Katja Jancic

currently is may, Okay. the the more If rate operating? one What on I Jamalco. facility is utilization

Jesse Gary

that of improvements the what what had profitability of been in And disruptions of of that of sort that and mentioned. tonnes million annualized some in to those return focusing we we've originally of So around on is the the operations we're volume the drove QX. right out stability coming we and really March X.X some

for the plant what guys it of proud reaching going returning gals means again that forward. and we're pushing guys the through and And stability about and excited profitability. Really -- for to

Operator

comes the question of next Wolfe Research. of Timna Tanners line The from

Timna Tanners

those follow-up to wanted a ask I bit topics. on more

a normalized Jamalco, just and I be be resolved, you there more Are as I Is on outage should clear run as the rate that wanted at Where stand? in missed lingering far equipment it. issues? So to does QX?

Jesse Gary

Yes.

that to We Equipment we rate Timna. quarter. continue over be expect that profitable resolved. at do second will normalized run in on, right should You're issue is QX. refinery And be the the

Timna Tanners

Great. Okay.

time So I are -- play. guys ever. covered recall in this you can't is that quite with a many I've busier than projects you so

high a got through quite casthouse, new it's into And a you're new deciding understand and at trying bit. add off-line Hawesville smelter, level, the the smelter also have look but also and Holly. casthouse, You've the to new capacity to just capacity casthouse, Iceland you Mt.

you So is really Or first smelter going? through doubling if off, and do vision adding from like share it there what's I all the the additional also imports, assume? taking the Is -- new I where a aluminum mean see you're there? capacity capacity,

versus balance you And restarting do alternatives and how new also, the capacity between then primary the secondary add smelters. existing looking to capacity and

some there, your of thoughts please. more want Just

Jesse Gary

our first, one are our I And that say forward A just from with driven like demand of by here. views we've Timna. the as I question, about just -- as is going we good been. Really agree to sure. aluminum would you, and of lot of Yes, busy excitement

lows crisis And stocks LME than crisis. and improving financial demand see in lower and out seen postfinancial and Europe since even we've start China. at inventories the both before see to the very You U.S. of themselves strong global demand we

driving metal from So right of out We the of excited talking about this about. the work meet of that's time really really all lot think there we part trends what's because lot a there future we a we we're our macro spent are are the opportunities think And aluminum to us. the of industry. for

recognition little to also our And operations bit just of give secondly, team. a I'd like to

with, to our have team job frankly, to and been -- because the for front. than because it's kept done But But longer We a they've volatile that credit goes ever for and able operations in do good long we're operating we've project stable that reasons time, we've real there. and is nose as are busy more been environments. macro ground, as have on achieving a of one really seen their the the the to

Okay.

your of there's Timna, to short a -- of in tonne fill that a production. replace And the that We lot we indeed, with be our share. position front that opportunities lot and question, then million projects do do imports would of So us. think U.S. in U.S. X.X to to design take would have

will growth smelter side, start like instance. is you plus restart, new to that and but plus for volumes gap. said, ability a I Mt. we're casthouse with lot get of the Holly the demand talking come for on with the about And in potential some secondary there of to As fill

you what's the on the when tariffs, a because on between Russian going between global ], of else. the focused that [ situated better footprint, look to on is the talked globally clear in Mexican call, And about EU, think secure sanctions, our lot of to at we anybody very between XX that's our trends, I work And operational X offer really we're than people customers chains. supply are that as

and we to And offer that on to that customers. want continue our execute to

know. once So we we're at go. of we're indeed Holly And the that think But I all to continuing of the work viable, these. those execute call, all all the to to -- of Mt. make all we're and sure We're at doing looking projects on as to ready restart. we we're said can progress these looking are the upfront

Timna Tanners

Okay.

So about that why looking little a But how the of was you vast amount smelter? additions capacity if helpful the, could market with a aluminum you're build at. to that bit new you're about regard obviously, talk thinking and

not [ more this tariffs, You the There's existing? built on smelter But alternative? a in primary reason for of note is you a been versus XX XX sanctions the a unique why probably over cetera. right, and build green hasn't barriers why mentioned, one because years. secondary X focus as ] opportunity And restart et that that. Maybe there

Jesse Gary

a good It's Yes. point, Timna.

you smelter of call, been a new mentioned as been So side Mt. on as And the has lot there in period. that U.S. your XXXX. advancement imagine, not might a you time efficiency over in since the was built in there's Holly built

us. a cost sites footprint And really we'll and long viable. U.S. what a build to should able So changer in we're here the the quartile globally. new for smelter, ready -- existing think game for We that first create the be that's those be to produce with are term But

And near-shoring tax looking at credits, a some to now why think that's real right you're together opportunity XXX the right, engage there's that. that, really putting trends, grant, in DOE the we're we of and

looking just both. versus we secondarily, will applications think many be in do require there -- at versus growth, growth primary. secondary secondary primary Maybe are There that

so and aluminum we primary credentials. the recycled secondary its for here smelter. for demand green and a that's then driver additional nature good there's And also growth calls and And think

here home products both helpful being to a will U.S. nice we a and able our in suite our at things So those of think when sales nice really the to offer initiative customers. that making is customers of we're be

Operator

Tumazos of the of John from John Tumazos Your comes question final line Independent Research.

John Tumazos

fail reline the or reline the expect you pots [indiscernible] lining line to the primary pot to before quarter Or could the in XXX? or fourth pot and you the the whole at a month output third that you Jesse, give fail? pots, Does productivity X quarters? in the you $XX delaying the continue in do little them into million there them was us X before expect year loss quarter? do second you will thing them first And reline it When lost? a you

Jesse Gary

Happy generally. John. just talk to to and really do Sure, about it this

from will portion reduce take get we generally falling consumption. in suppliers a So do in our energy one of energy your QX. that of an when is into as curtailment Iceland basically bit equal you energy like pots offline we you an a discussed, what small to QX curtailment have And did your and of to you

that's in And QX. happened what so

the anyway. might when during due you which for would that relining we that to choose imagine, ones take take quarter as we be pot offline, And

you a because because you've in QX, them bit not deferral of So a you're get out energy curtailment. relining to meet the pots taken

ready which both what put we get online, as is in to and you then pots have QX And that you will QX, planning really the pots that back there. see million drives are would pots in you you to those relined $XX QX reline headwind reline in the

thing not to repeat, our forward. onetime in be will process and go that relining QX, So we'll normal a will going back pot

John Tumazos

now catch-ups ]. are other these have [indiscernible] on rising? cost price other there right for [ the a delayed the Are engineers room have the Are there metal or For that working that and moving projects been where little now a with rate expenses breathing any Ryan things example, might in do all you'd XX% direction?

Jesse Gary

Not really, John.

you time do through maintain is stable the As to keep cycles, CapEx in as learned over while through sustaining cycles. go try really programs on the we we you these want market the long thing business and to cyclical, run this our operating as is plants periods basis. a steady of One possible being

that large we amounts to so CapEx over defer time. of And not try sustaining

going think a not whole So items that that I should clean that of can be pretty fall perspective. category, would from forward into lot that

John Tumazos

I midnight working do in aluminum market smelter. all the it. oil these needs want that to things. And and secondary The on with it's hard so great burn greenfield guys the you complement expansions you

Jesse Gary

that. appreciate really We John. Thanks,

Operator

are there call to like I'd over conference waiting As back hand questions Jesse additional at time, this closing no to remarks. the for Gary

Jesse Gary

for call everyone, joining the Thanks, today.

like end the talk forward. the outlook and Jerry would run-up just prices our call, impact to I about a Just bit mentioned, I going recent LME will to before take time how those of in as little

if people runs remember, also So first run as through results. adjusted just to with our you our will and lags how and as customers do mentioned, well, LME maybe have -- results Jerry we through if regional premiums our how start,

got lag primarily And lag a X-month at the look volumes. X-month XX% and on volumes we've of a volumes, of that, U.S. lag. Iceland our for X-month the So when XX% for for runs a you

the bit running a of our get you results. through LME do of of benefit delay So rising little a

premiums. the on Similar

European can have the X-month And that's our premium. a of these you've lag you and lag You XX Midwest Slide a financial on on on lags all see got X-month information on slides. premium, the

so LMEs, before $XX much somewhere you additional and And results mentioned, million of higher have. opportunities lags with exist did outlook look a and $XX get a second between just quarter that that second we as instead the at you those estimated spot didn't Jerry upside that's if for assume million. And

instance, what EDPP, look at if QX. it's to look forwards, QX they is if our if the And in you So were higher. is from are $XX about where that premiums, at trading versus U.S. you $X.XX those where at regional today for look you Midwest in results, $X.XX it higher

casthouse. additional over but Grundartangi represent as also our to upside well, for XXXX our see we the season expect for those to both XXXX of into the and both continue existing improve market course billet And will the business. casthouse So contracting that certainly continue U.S. the value-added of

wait And there, guide get on guidance. you do But that then to updated continue to for finally, of in interpretation be XXX the we if see the QX. that costs would broader we eligible additional the upside

of So the we excited produce and business. there's on one think we're projects. think about us help and these really the perform opportunities. great execute question. will lot to really a has business I Lucas we look well also results We more as see And do expansion

happy to So that. take

Operator

of [Operator from Instructions] this Riley. question comes So Lucas B. Pipes

Lucas Pipes

questions. of were So late answering some I the actually And back there your was follow-up a just getting now my in in queue. just comments little

really appreciate all I So those remarks.

debt. it to flagged of about priority balance to as touch sheet. a ones the on you wanted think how One just I In you the reduce the release, was

your of this cost How think shares traded debt, Your of environment? kind of optimizing about balance in much equity, do have you sheet better. cost the

Jesse Gary

Thanks, Lucas.

will of towards cash there, order we're flow allocate in something this simply at that's considering time. We reducing not plenty very Just that debt. really be net think there to

the that markets expect on we the we really huge for quarters and go business, our really few think need flows that, there's any which, for at significant time. so cash equity the would cash prioritizing not through, as just went opportunity of the to I over be course this next plan to flow And this

Lucas Pipes

And commented was XXX. -- lot end to around as detail as at Very opportunity additional And the power helpful, a on I your the in very environment. helpful. that provided remarks, you very that was of just then earnings said. your Very, there you of this

going the were have today, back be would XXX, an to just benefit the to be you great on additional contribution? to full It get that. if update would And what

Jesse Gary

But and investor in this of to through this And see would in sort deck. last included, going if in similar on Sure. about credit that our million $XX and that million $XX additional an the on the went XX detail uptick can Slide indirect for uptick be on call are forward direct you we XXXX materials raw and slide some XXXX.

Lucas Pipes

looking kind as is that of utilization this backwards XXXX to again, rate. And

kind we back, restart that full scale a and could up with So of Mt. Holly [indiscernible] maybe coming proportionately.

Jesse Gary

but obviously, also away, for And would some is Absolutely. eligible the distance Yes. credit. that the greenfield be

Operator

questions are There no additional waiting.

the hand Gary call. So I'll Jesse, --

Jesse Gary

talking Thank to We you forward you for everyone, call. our summer this joining. for to much, very later look QX

Operator

all call. rest gentlemen, a Have you for great your thank like Ladies I'd day. and of to today's joining

now disconnect. You may

Century Aluminum (CENX) 1 May 242024 Q1 Earnings call transcript