Century Aluminum(CENX)2024-08-09 17:45Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $34 million for Q2 2024, a sequential increase of $9 million driven by higher realized metal prices and regional premiums [3][13] - Net sales reached $561 million, reflecting a 15% sequential increase due to higher metal prices and regional delivery premiums [13] - Adjusted net income was $1 million or $0.01 per share, with liquidity improved to $343 million, the strongest position in nearly a decade [13][14] Business Line Data and Key Metrics Changes - Global shipments for Q2 were approximately 168,000 tons, slightly lower than the previous quarter due to typical fluctuations [13] - Realized LME prices increased to $2,288 per ton, up $98 from the prior quarter, while U.S. Midwest premium rose to $416 per ton, up $7 [14] - European delivery premium increased to $284 per ton, up $61 from the previous quarter [14] Market Data and Key Metrics Changes - Aluminum prices rose during Q2 due to stronger global demand, particularly in China, but have recently retreated due to macroeconomic concerns [4] - The alumina price index (API) rose significantly, averaging 19% higher than Q1 levels, reaching over $500 per ton in June [5] - The company noted that global trends towards electrification and lightweighting will continue to drive increased demand for aluminum [5] Company Strategy and Development Direction - The company is focused on maximizing the value of its assets, particularly in light of the strong aluminum market conditions and trade actions that favor U.S. and EU production [9] - The company is working on growth projects and expects to provide updates in future calls [12] - The management emphasized the importance of maintaining a flexible energy arrangement to adapt to market conditions [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the aluminum market's tightness and the supportive relationship between alumina and aluminum prices, which is currently higher than historical averages [35] - The company anticipates a Q3 adjusted EBITDA in the range of $65 million to $75 million, reflecting expected increases in LME and delivery premiums [17] - Management acknowledged the impact of Hurricane Beryl but indicated that operations have returned to normal levels [11][31] Other Important Information - The company successfully lifted a 20 megawatt energy curtailment in Iceland, returning to full production by the end of Q2 [9] - Jamalco operations achieved their targeted production rate of 1.2 million tons per annum despite facing challenges from Hurricane Beryl [6][11] Q&A Session Summary Question: Perspective on power markets and interest from third parties - Management is actively monitoring power markets and exploring options to maximize the value of their power infrastructure [18][19] Question: Update on 45X guidance and new smelter development - Management is engaged with the administration regarding 45X but does not have an updated timeline [20][21] Question: Margin profile of incremental volumes from Mt. Holly restart - Management indicated that the last tons from the smelter are typically the most profitable, and they are preparing for a potential restart [22][23] Question: Situation at Jamalco and force majeure declaration - Management confirmed the declaration of force majeure due to port issues but stated that production is back to normal [25][26] Question: Broader aluminum market dynamics - Management noted the unusual high relationship between alumina and aluminum prices and expressed confidence in the sustainability of current market conditions [34][35]