CHICAGO Century Aluminum Co. could continue to operate its Hawesville, Ky., smelter even if it were to lose the facilitys largest customer, Southwire Co., according to company president and chief executive officer Michael Bless.
The Monterey, Calif.-based aluminum producer has been in touch regularly with the Carrollton, Ga.-based wire and cable producer, Bless said, referring to the possibility of the Hawesville smelter closing and Century terminating its supply contract with Southwire (amm.com, April 17).
Century announced plans to idle its Hawesville smelter Aug. 20 unless it could secure a better power deal with power supplier Big Rivers Electric Corp., Henderson, Ky. Century, which gave Big Rivers a 12-month power termination notice for the Hawesville smelter last August (amm.com, Aug. 20), said April 29 it had reached a tentative power agreement for the smelter. The agreement remains subject to third-party approvals, including from the Kentucky Public Service Commission and the Rural Utilities Service.
Southwire, which has a facility adjacent to Centurys Hawesville smelter, indicated that it hah contingency plans should Century close the facility (amm.com, April 18).
Century is confident that it could "sell every ton we produce at Hawesville" even without Southwire, Bless said.
Baar, Switzerland-based Glencore International Plc also could be impacted by Hawesvilles closure, Bless said. Century has a "sweep contract" under which Glencore takes whatever free metal Hawesville produces. "If there were no metal, there is no obligation," he said.
Asked by Bank of America Merrill Lynch senior research analyst Timna Tanners whether Hawesville has been "loss-making," Bless conceded that it has been. However, he stressed that Century did not see the facility primarily in those terms. "It would be devastating to us if we had to close that plant for a whole host of reasons," he said, noting the "broad and deep" talent at the plant.
Bless noted that there had been "a tick up in incidents" at Hawesville in January, with production volumes at the facility slipping during the first quarter because of "six to seven" pot failuresmore than Century had anticipated. "We are through that now and were back to a full pot complement," he said.