Century continues with primary aluminium downturn in Second Quarter 2016

As a continuation of the downturn of US primary industry Century Aluminium Company reported a net loss of $9.5 million ($0.11 per share) for Q2 2016. The adjusted net loss of second quarter was $4.6 million ($0.05 per share).

For the second quarter of 2015, Century reported a net loss of $33.9 million ($0.39 per share) partially caused by permanent closure of our Ravenswood smelter and a $25.7 million charge for lower of cost or market inventory adjustments. Results were also negatively impacted by labour disruption at our Hawesville smelter.

Total sales during Q2 2016 were $326.8 million in comparison to $523.5 million in Q2 2015. Shipments of primary aluminium were 185,567 tonnes compared with 233,950 tonnes in Q2 2015. The capacity closure during the second half of 2015 is responsible for the drop in sales and shipment volume.

For H1 2016, Century reported a net loss of $25.7 million. Results included a favorable impact of $0.9 million for lower of cost or market inventory adjustments. For H1 2015, Century reported a net income of $39.9 million.

Sales for H1 2016 were $645.6 million compared with $1,111.4 million in H12015. Shipments of primary aluminium in H1 2016 were 368,186 tonnes compared with 479,208 tonnes in H1 2015. The decrease in sales and shipment volume was directly attributable to capacity closure 2015.

Commenting on the results, Michael Bless, President and Chief Executive Officer of Century aluminium said, "Geopolitical uncertainty and volatility have persisted throughout 2016…Recent events have caused additional distortions in the currency markets and in interest rates, further pressuring commodities prices. The aluminium price has performed relatively well in these difficult market conditions. Demand in our end markets remains robust and, barring a significant exogenous shock, should remain so. “

He pointed towards Chinese oversupply and state supported aluminium overproduction and shipping as one of the crucial reasons for the aluminium market in US and urged firm action to be taken against such unethical trade practices which is posing a clear danger to the remaining U.S. aluminium industry.

"Within this challenging environment, we continue to manage the company with an emphasis on the integrity of our operations," added Mr. Bless. "Safety performance has been encouraging; we insist on continuous improvement in this most important area…this strict focus on our operations will preserve Century's ability to capitalize when the market environment becomes more favorable."

Mr. Bless also talked about the power issue they are facing for the Mt. Holly smelter.  They are buying seventy- five per cent of electric power from a third-party supplier but are required to purchase twenty-five per cent of the plant's power consumption from the state-owned provider at a very high cost. He also urged for a structural change in their electric power arrangements in South Carolina.