Commodities & Metals

Century Aluminum Issues Warning

Aluminum
Source: Thinkstock
Century Aluminum Co. (NASDAQ: CENX) is making waves in the after-hours trading session following the release of a warning for a potential closure. The company issued a notice to employees at its Hawesville, Kentucky, aluminum smelter of its intent to curtail its plant operations beginning on October 24, 2015 unless the current pricing environment substantially changes.

Overall there are about 565 employees at Hawesville. However, it is worth pointing out that this action does not affect Century Aluminum’s Sebree or Mt. Holly operations.

Michael Bless, President and CEO of Century Aluminum, said:

We regret the need to issue this notice at this time and fully understand the impact it will have on our employees, in our community and with our customers. The simple fact is that the recent significant decline in the aluminum price is being driven by unfair trade behavior over which our industry has no control. Chinese overcapacity and the improper export of heavily-subsidized Chinese aluminum products have undercut an otherwise viable plant. These issues must be addressed immediately. The strategy we set forth for Hawesville continues to be valid. It is solely the collapse in industry pricing, brought about by this improper trade behavior, that has put this excellent plant in jeopardy.

So far in 2015 Century Aluminum has vastly underperformed the market and shares are down 81% year to date. This is predominantly due to weak aluminum prices.

Shares of Century Aluminum closed Tuesday up 1.1% at $4.65 on its 52-week trading range of $4.58 to $31.75. Following this announcement, shares were down 0.4% at $4.63 in the after-hours trading session. The stock has a consensus analyst price target of $12.71.

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