Century Aluminum Co

Alcoa has revised down its 2016 global aluminum demand growth projection to 5%.

Alcoa (AA) is expected to release its 2Q16 earnings on July 11. The company is in the final stages of its split, which will create two new entities.

Alcoa’s leverage ratio has increased over 2Q 2014. This basically means that the proportion of debt in Alcoa’s capital structure has increased.

Alcoa idled several smelting plants since 2007. Its aluminum smelting capacity has come down by 28% over the period. Most of these smelters had high unit production costs.

Trading on the London metal exchange determines the price for primary aluminum. Any increase in the price of aluminum benefits companies that produce primary aluminum.

Alcoa announced the acquisition of Firth Rixson. Firth Rixson is the largest jet engine ring manufacturer. It gets ~75% of its revenues from aerospace industries.

Alcoa prices its aluminum with a 15-day lag to LME aluminum prices. Its 1Q earnings lost $84 million due to a decline in aluminum prices.

The decline in alumina prices is a concern for Alcoa. The profitability of its alumina operations would be hit due to lower alumina prices.

China exported 350,000 metric tons of unwrought aluminum in October. Chinese aluminum exports fell ~1.8% YoY in the first ten months of 2016.

Aluminum premiums are negotiated between aluminum warehouses and the end buyers. This makes them less susceptible to speculation.

The aluminum process starts by extracting bauxite from the Earth’s crust. The bauxite is refined into alumina. Alumina is a key raw material—along with carbon and electricity.

Alcoa (AA) has integrated operations. Under the current market scenario, integrated operations could become Alcoa’s competitive advantage.

According to data compiled by Bloomberg, Century Aluminum is expected to post revenues of $445.7 million in its 3Q15 earnings release. In 2Q15, it had net revenues of $523.5 million.

For commodity companies like Rio Tinto (RIO), the industry outlook is as important, if not more important, than the company’s position in the industry.

Aluminum industry outlook For commodity companies like Rio Tinto (RIO), industry outlook is as important—if not more important—than the company’s position in the industry. Let’s see what senior aluminum executives have had to say about the aluminum industry’s outlook during their companies’ 3Q16 earnings calls. Century Aluminum Century Aluminum (CENX) expects two million metric tons […]

Aluminum prices were strong for most of 2014. But OPEC changed all that last fall when it decided to maintain crude oil output levels.

Century Aluminum’s earnings have come under severe pressure because of the steep correction in aluminum prices. The company posted a gross loss in 3Q15.

Rio Tinto (RIO) and Alcan combined in 2007 to form Rio Tinto Alcan, a global leader in the aluminum industry. Its fully integrated facilities include high-quality bauxite mines…

Alcoa’s engineered products and services In the previous part of this series, we discovered that the engineered products and services segment is Alcoa’s (AA) most profitable. In this part, we’ll look at two factors that will drive this part of the business in 2015. Non-residential construction Alcoa earns almost $1 billion in revenues from the non-residential construction industry. Non-residential construction is picking up, […]

China’s unwrought aluminum exports rose 20.4% YoY in August. Although the increase is a concern, things aren’t as bad as suggested by the big YoY spike.

In 2014, Alcoa (AA) sold its stake in the Mt. Holly smelter to Century Aluminum (CENX).

The question of restarting US plants cropped up during Alcoa’s 4Q16 earnings call. However, Alcoa’s management sounded wary.

Bauxite is the main raw material in aluminum production. China lacks high-quality bauxite reserves. Until last year, China was relying on bauxite from Indonesia.

Alcoa (AA) reported its 4Q17 earnings on January 17, 2018, after the markets closed. The company posted an adjusted EPS of $1.04 in 4Q17.

Alcoa (AA) is an integrated aluminum producer like Rio Tinto (RIO) and Norsk Hydro (NHYDY) and produces alumina and aluminum (DBB).

While Alcoa (AA) has seen upward price action following its split, Arconic (ARNC) has sagged. However, Arconic’s investors can still find some solace in Alcoa’s gains.

Alcoa’s (AA) valuation has fallen over the last year. Currently, it trades at a discount to its five-year average. The valuation fell for a reason.

Although lower alumina prices might not immediately lead to a decline in aluminum prices, they certainly could limit aluminum’s upside.

Most aluminum producers’ earnings were received well by markets. Alcoa (AA) saw an upward price action of 5.4% after its earnings release.

President Trump has hardened his stance on trade issues, threatening tariffs on billions of dollars of Chinese goods.

In this article, we’ll analyze how analysts are rating Century Aluminum leading up to its 4Q16 earnings.

Fortunately for Century Aluminum, its leverage ratios are currently much lower than other companies in this space. CENX has $123 million in cash that should help it manage its operations over the next few quarters

The Saudi Arabia JV is expected to produce its own electricity. The Middle East has access to cheap fuel sources. As a result, the overall production cost is expected to be lower in this plant.

Currently, the aluminum industry is plagued with overcapacity amid weakening demand. This has led many players to announce capacity curtailments in 2016.

The aerospace segment is the one of the biggest aluminum consumers in the world. Alcoa (AA) got $4 billion in revenue from aerospace companies last year.

According to the steel industry, aluminum production is energy intensive. As a result, it isn’t an environmentally-friendly metal—like it’s made out to be.

Alcoa (AA) is gearing up for its split, which is scheduled in the second half of 2016. After the split, the value-added company—which will be named Arconic—will produce precision components and other value-added products.

Norsk Hydro (NHYDY) has announced a production halt at its Alunorte alumina refinery in Brazil.

In 2018, analysts expected disruptions in the copper supply. However, the copper supply has been resilient in 2018.

Century Aluminum (CENX) was among the best-performing aluminum stocks in 2016, with gains of 94%.

Rio Tinto’s (RIO) Aluminum division contributed 19% of its 1H16 underlying EBITDA (or earnings before interest, tax, depreciation, and amortization).

In this series, we’ll pay special attention to Alcoa’s 2014 performance and to how investors can play Alcoa and other aluminum companies in 2015.

In this part, we’ll look at Century Aluminum’s valuation multiples after its 2Q15 earnings release.

The profit margins vary across the aluminum value chain. Upstream aluminum producers’ earnings depend on their position on the cost curve.

The aluminum division contributed to 23% of Rio Tinto’s (RIO) 1H15 underlying EBITDA (or earnings before interest, tax, depreciation, and amortization).

Bauxite is the most abundant metal in the earth’s crust. Because of the many impurities in bauxite, it must be refined to produce alumina.

Primary aluminum and alumina are commodity products. Producers don’t have much control over their pricing. The prices are decided by market dynamics.

We could see a spike in US steel and aluminum production this year. Tariffs could reduce imports to some extent.

Constellium is engaged in the aluminum fabrication business. Fabricators give custom shape and size to primary aluminum.

Alcoa (AA) expects to generate adjusted EBITDA between $2.1 billion and $2.3 billion in fiscal 2017. Alcoa assumed aluminum prices at $1,900 per metric ton.

Weak sentiment in physical aluminum markets could be a reason behind the divergence between Alcoa (AA) and aluminum prices.

Crude oil prices impacted Alcoa’s automotive sales. Under its transformation strategy, Alcoa (AA) is working to address the automotive companies’ lightweighting needs.

Midstream operations, or global rolled products, produce aluminum sheets that are used in the packaging, automotive, and aerospace industries.

While aluminum demand is still rising, there are varying estimates about aluminum consumption.

Rio Tinto (RIO) and Alcan combined in 2007 to form Rio Tinto Alcan, a global leader in the aluminum industry.

In 1Q17, there were rumors that Rio Tinto (RIO) could acquire Alcoa.

Global aluminum markets have seen significant volatility this year. Aluminum prices topped the $2,500 per metric ton level in April.

Alcoa (AA) expects global aluminum demand to exceed supply in 2018 on China’s supply-side reforms.

Alcoa (AA) released its second-quarter earnings on July 18. The company reported revenues of $3.6 billion in the second quarter.

Currently, Alcoa is trading at 8.6x its forward EBITDA. This valuation multiple looks somewhat aggressive for a pure-play commodity producer.

Three analysts rated Alcoa stock as a “strong buy,” seven analysts rated it as a “buy,” and four analysts rated it as a “hold” or some equivalent.

The unwinding of aluminum financing deals could have a negative impact on aluminum prices. Earnings of aluminum producers such as Alcoa (AA) are sensitive to aluminum prices.

Alcoa (AA) released its 1Q17 earnings on April 24 after the markets (MDY) (MID-INDEX) closed. It held the conference call the same day.

During their 2Q16 earnings calls, Century Aluminum (CENX) and Norsk Hydro (NHYDY) expressed concern over higher Chinese supply in the second half of the year.

If aluminum premiums come down, the revenues of primary producers will be impacted negatively.

Litigations can be a big blow for aluminum producers. Litigations are expected to decrease aluminum prices and premiums. This will be negative for aluminum companies like Alcoa Inc. (AA), Century Aluminum (CENX), Kaiser Aluminum Corp. (KALU), and Constellium (CSTM).

Alcoa’s technical indicators To make market entry and exit decisions, traders and investors analyze technical indicators. Resistance and support levels are among the most commonly used technical indicators. Resistance level Support levels typically act as a floor for stock prices. As a stock approaches its support levels, more buyers emerge while selling pressure generally subsides. […]

China’s aluminum exports have been on an uptrend, increasing 35% year-over-year in the first five months of the current year.

Rio Tinto (RIO) and Alcan combined in 2007. They formed Rio Tinto Alcan. It’s a global leader in the aluminum industry. Aluminum is a light, strong, flexible, non-corrosive, and recyclable metal.

Higher Chinese aluminum production could spoil the party that companies such as Alcoa and Century Aluminum (CENX) are currently enjoying.

Alcoa is working to expand its capacity in Tennessee. It’s a $275 million investment. Alcoa expects that the facility will be operational by mid-2015.

Protecting US manufacturing from the onslaught of imports was among the key topics of President Trump’s election campaign.

After the split, the new Alcoa (AA) will house the business units that are currently under the Primary Metals and Alumina segments. We’ll look at the challenges that Alcoa could face once it is listed as a separate company.

Alumina producers price their products at a percentage of aluminum prices. Alumina prices depend on prevailing aluminum prices on the LME.

Previously in this series, we’ve seen the key concerns of Alcoa’s (AA) split into two companies. The question around the split is not “why split?” but rather “why now?”

Alcoa has been strengthening its downstream business by making multiple acquisitions to grow its value added business. Earlier this year, Alcoa announced the acquisition of RTI Metals (RTI).

Last year, aluminum was the most actively traded metal on the London Metal Exchange (or LME). This was due to financing deals in aluminum.

Investors like aluminum. They can play the aluminum industry by trading aluminum on commodity exchanges. Investors can also investment in aluminum plays.

The Gulf Cooperation Council (or GCC) accounts for ~8% of global aluminum production. The GCC is an economic alliance. It includes six countries in the Middle East.

Analysts expect that most of the metal has been moving away from LME registered warehouses to non-LME registered warehouses, which typically charge less rent than registered warehouses.

With inventories coming out of the warehouses, the artificial shortage of aluminum should come down. This can have a negative impact on aluminum premiums.

Aluminum premiums impact the profitability of aluminum plays depending on where each sits in the aluminum value chain. Alcoa is a primary producer.

Vehicle lightweighting is definitely the theme in the automobile industry. Automobile companies can either move to aluminum or use more high-strength steel products.

Alcoa is an integrated player in the aluminum value chain. This means its operations extend from bauxite refining to aluminum fabrication.

Alcoa (AA) is the largest aluminum company in the US. It’s among the top three aluminum producers globally. The company was founded in 1888.

Century Aluminum has the highest price-to-earnings ratio compared to its industry peers.

Century Aluminum reported an adjusted earnings per share of $0.52 in the third quarter, a 135% increase over its 2Q EPS of $0.22.

If the current profitability of the Mt. Holly plant remains steady, Century’s acquisition of the plant can add another $44 million to its 2015 EBITDA.

The Mt. Holly plant added $11 million in earnings before interest, taxes, depreciation, and amortization to Alcoa’s 3Q earnings.

Along with closing plants with high unit production costs, Alcoa is in the process of exiting its plants in Jamaica and Suriname. These plants represent Alcoa’s high-cost operations.

Aluminum has become a favorite for investors who want to diversify their portfolios. After the global recession, it’s emerged as a hard asset.

Aluminum is the most abundant metal found in the earth’s crust. It’s soft, lightweight, and durable in nature. Its low density and resistance to corrosion make it a very important metal that a lot of industries use.

Contrary to global expectations, China has increased its smelting capacities in the past decade. There are plenty of reasons behind this move.

The aluminum industry has a value chain that consists of both upstream and downstream companies. Upstream companies are engaged in the mining and refining operations.

Last year, President Trump slapped a 10% tariff on US aluminum imports. Alcoa didn’t support the tariffs in the first place.

President Trump imposed tariffs on US steel and aluminum imports in March.

Alcoa (AA), the leading US-based aluminum producer, fell 9.0% in November. Alcoa has fallen 41% in 2018.

On paper, aluminum’s fundamentals look strong. Aluminum markets were expected to be in a deficit of 1.5 million metric tons last year.

Alcoa (AA) has seen an upward price action of 13.5% in 2019 based on its closing prices on February 22.

On February 21, Century Aluminum released its fourth-quarter earnings after the markets closed. The company posted an adjusted net loss.