Century Aluminum Co (NASDAQ: CENX)

Century Aluminum Co is a global producer of primary aluminum, operating aluminum reduction facilities, or "smelters," in the United States and Iceland. The company's core business revolves around the production of standard-grade and value-added primary aluminum products, which are essential in various industries such as automotive, construction, and packaging. Aluminum is an internationally traded commodity, with its price determined on the London Metal Exchange (LME), plus applicable regional and value-added product premiums. Century Aluminum's current annual production capacity stands at approximately 770,000 tonnes per year, with a production output of around 638,000 tonnes in 2025.

The company generates revenue primarily through the sale of its primary aluminum products. These products include standard-grade aluminum ingot and value-added products such as primary foundry alloy, billet, and foundry products. The value-added products are sold at premiums to standard-grade aluminum, enhancing the company's revenue streams. Century Aluminum's customer base is diverse, with a significant portion of its sales derived from a small number of key customers, including Glencore plc and its affiliates. Glencore purchased aluminum produced at Century Aluminum's U.S. and Icelandic smelters at prices based on the LME price for primary aluminum plus regional premiums and additional market-based product premiums.

• Primary Aluminum Facilities: Century Aluminum operates three primary aluminum smelters: Grundartangi in Iceland, Sebree in Kentucky, USA, and Mt. Holly in South Carolina, USA. The Grundartangi facility is the most modern, with a production capacity of approximately 320,000 tonnes per year. It produces standard-grade aluminum ingot and primary foundry alloy. The Sebree facility has an annual production capacity of approximately 220,000 tonnes and produces standard-grade aluminum that can be cast into sow and value-added products. The Mt. Holly facility has an annual production capacity of approximately 230,000 tonnes and produces standard-grade aluminum as well as several value-added products, including billet and foundry products.

• Carbon Anode Production Facility: The company owns and operates a carbon anode production facility in Vlissingen, Netherlands. This facility has an annual production capacity of approximately 161,000 tonnes of carbon anodes, which are essential for the production of primary aluminum. The Vlissingen facility primarily supplies carbon anodes to the Grundartangi smelter, fulfilling between 93% and 98% of its requirements.

• Bauxite Mining and Alumina Refining Facility: Century Aluminum has a 55% joint venture interest in Jamalco, a bauxite mining and alumina refining operation in Jamaica. Jamalco has alumina production capacity of approximately 1.4 million tonnes, with a production output of around 1.0 million tonnes in 2025. The company's share of Jamalco's production capacity is approximately 770,000 tonnes per year.

Century Aluminum operates in a highly competitive industry, facing competition from both domestic and international aluminum producers. Key competitors include larger, vertically integrated companies that may have access to key production costs at lower prices and receive various subsidies from local, state, and federal governments. Despite these challenges, Century Aluminum has several competitive advantages. The company's focus on the primary aluminum business allows it to optimize the cost-effectiveness of its operations and maintain a market position targeted toward a broad range of end uses. Additionally, Century Aluminum has strong internal growth opportunities, with ongoing expansion programs at its operating facilities. The acquisition of a 55% interest in Jamalco has secured a long-term supply of alumina, a critical raw material, and achieved increased transparency and control of the supply chain.

The company's customer base is concentrated, with a significant portion of its sales derived from Glencore plc and its affiliates. Glencore purchased aluminum produced at Century Aluminum's U.S. and Icelandic smelters at prices based on the LME price for primary aluminum plus regional premiums and additional market-based product premiums. The company also has agreements in place to sell a substantial portion of its 2026 production to Glencore, with the rest of its 2026 customer base expected to remain fairly concentrated among a small number of customers under short-term contracts.