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Century Aluminum returns to profit, warns of uncertainty

Keywords: Tags  Century Aluminum, Michael Bless, earnings report, Hawesville, Ravenswood, Iceland, power negoatiations, aluminum Michael Cowden


CHICAGO — Century Aluminum Co. returned to profitability in the first quarter but warned that market volatility has increased.

"Overall we continue to expect medium- and longer-term global trends to be favorable and are thus executing our strategic plans," president and chief executive officer Michael Bless said in a statement released with earnings data after the market close April 25. "We are, however, working to preserve considerable flexibility in the present uncertain environment."

Among the concerns Bless cited were mixed economic data out of China, which he said showed industrial and consumer activity still growing but at a slower pace. Growth in emerging markets also has slowed, and economic conditions in Europe remain difficult.

Perhaps bucking the trend is the United States, where "end markets remain generally strong," Bless said.

The Monterey, Calif.-based aluminum producer posted net income of nearly $7.57 million in the first three months of 2013 in contrast to a net loss of $4.4 million in the same period last year on sales that slipped 1.5 percent to $321.27 million.

Century said it is continuing rate discussions with Big Rivers Electric Corp., the power provider to its Hawesville, Ky., smelter, but noted that it had not yet reached an agreement.

"We remain optimistic that a solution exists that would support the plant’s continued operation and would have, at worst, no impact on any other ratepayer in Kentucky," Bless said. If Century is able to achieve what it considers to be a "market-based power price," Hawesville could "operate for many years to come."

The company has issued a Worker Adjustment and Retraining Notification Act notice to the 750 employees at the 244,000-tonne-per-year Hawesville plant and said it could idle the smelter by Aug. 20 unless it can secure a better power deal with Henderson, Ky.-base Big Rivers (amm.com, April 17).

Century contends that the Hawesville operation requires a more competitive power rate. Big Rivers has countered that it cannot provide power at less than the cost to produce it.

Bless said the restart of Century’s Ravenswood, W.Va., facility remains a priority for the company, and discussions with the plant’s power provider and other interested parties are ongoing.

Century also is in discussions with the power supplier to its Helguvik, Iceland, operation and is optimistic that an expected new government in the country could allow major construction to resume at the site, Bless said. "An adequate supply of power and a guarantee of the necessary transmission capacity are the only impediments to a full restart of this attractive project."


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