NASDAQ:CENX Century Aluminum Q4 2023 Earnings Report $16.79 -0.46 (-2.67%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$16.78 -0.01 (-0.06%) As of 04/25/2025 07:29 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Century Aluminum EPS ResultsActual EPS$0.30Consensus EPS -$0.23Beat/MissBeat by +$0.53One Year Ago EPSN/ACentury Aluminum Revenue ResultsActual Revenue$512.30 millionExpected Revenue$514.40 millionBeat/MissMissed by -$2.10 millionYoY Revenue GrowthN/ACentury Aluminum Announcement DetailsQuarterQ4 2023Date2/21/2024TimeN/AConference Call DateWednesday, February 21, 2024Conference Call Time5:00PM ETUpcoming EarningsCentury Aluminum's Q1 2025 earnings is scheduled for Tuesday, April 29, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Century Aluminum Q4 2023 Earnings Call TranscriptProvided by QuartrFebruary 21, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good afternoon. Thank you for attending the Century Aluminum Company 4th quarter 2023 earnings conference call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Ryan Crawford with Century Aluminum. Operator00:00:22Ryan, please go ahead. Thank you, operator. Speaker 100:00:25Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer Gary Bialik, Executive Vice President and Chief Financial Officer and Peter Trzypowski, Senior Vice President of Finance and Treasurer. After our prepared comments, we will take your questions. As a reminder, today's presentation is available on our website at www.centuryaluminum.com. We use our website as a means of disclosing material information about the company and for complying with Regulation FD. Speaker 100:01:04Turning to Slide 1, please take a moment to review the cautionary statements shown here with respect to forward looking statements and non GAAP financial measures contained in today's discussion. And with that, I'll hand the call to Jesse. Speaker 200:01:19Thanks, Ryan. Thanks to everyone for joining. I'll start today by quickly reviewing our 2023 performance before turning to the current macro environment and some dynamic operating conditions we are working through in Q1. Jerry will then take you through the details of the Q4 results and Q1 outlook, And then I'll finish with an update on the Inflation Reduction Act, potential further benefits that we expect to receive. Turning to Slide 3. Speaker 200:01:47Market conditions remain volatile last year, reflecting a seemingly new normal we've experienced post COVID, where a broadly balanced global supply and demand picture for aluminum is paired with historically low levels of inventories. Tight global inventories along with rising and dynamic geopolitical tensions has created a market where small changes in market conditions are driving outsized effects on aluminum prices. Despite this continued volatility, Centuri produced adjusted EBITDA of $120,000,000 in 2023, including $57,000,000 of adjusted EBITDA in Q4, reflecting the impact our 2023 Inflation Reduction Act Advanced Manufacturing Credit. Jerry will give you the full details here in a bit. Our team completed several strategic projects last year, including the acquisition of our 55% share in Jamalco, completing our long held ambitions to secure a captive supply of high quality alumina and bauxite for our smelters to create a more balanced, consistent and robust operational footprint and better position us to deliver strong performance through commodity cycles. Speaker 200:03:00Returning this asset to its full potential will continue to be one of our main priorities in 2024. Finally, we continue to focus on our most important priority to return our employees home safely at the end of each and every day. While we will never be satisfied until we achieve 0 workplace injuries, our team should be proud to have reduced injuries by 20% over 20 22 levels. We hope to significantly improve on this trend in the coming year. Market conditions for Century's businesses continue to reflect uncertain macroeconomic conditions in much of the world. Speaker 200:03:39As you can see on Slide 4, global supply and demand remain roughly balanced and global inventories remain near all time lows. The driving forces behind these balanced markets, however, are much more dynamic than years past and reflect the complexity of the current market. Supply was largely constrained over the past year. In China, growth was limited by their 45,000,000 ton capacity cap and continued curtailments in Yunnan and surrounding provinces. Western supply also remained challenged over the past year by a difficult demand picture that ultimately led to the curtailment of 2 more Western smelters in Neuss, Germany and New Madrid, Missouri. Speaker 200:04:23A bit further east, Russian metal continues to be disfavored in Western markets, where Russian metal today constitutes 90% of all LME inventories. There have been increasing calls for Russian aluminum sanctions in the EU and U. S. Following the initial implementation of a 200% tariff on Russian products into the U. S. Speaker 200:04:45And an EU ban on certain downstream Russian aluminum products into the EU. On the demand side, Western world demand appears to have reached a low in Q3, driven by continued destocking across downstream users and challenging EU industrial growth. The market saw increased demand in Q4 and we now expect an improved and growing Western demand Western demand equation in 2024. Overall, we expect that Western demand will return to its long term growth rates as falling interest rates and improved GDP growth returns to the U. S. Speaker 200:05:22And EU markets. And the Inflation Reduction Act and similar spending programs in the EU and elsewhere continue to drive increased aluminum demand in automotive and renewable energy applications. The largest demand side story in 2023, however, was the strength of the Chinese market, we saw Chinese demand growth of 5% in 2023 and expect to see similarly high growth rates this year. We estimate that the Chinese market imported about 1,300,000 tons of non Chinese production last year, and we expect that to expand further this year. Chinese demand growth has been driven by the broad macro trends we have long expected, namely in aluminum intensive electric vehicles and renewable energy applications. Speaker 200:06:12We expect demand growth in these areas to continue to accelerate this year, both in China and the West. As we have discussed over the course of the past year, build demand in the U. S. And Europe has been a relatively weak point in the market as post pandemic destocking continued and increased imports of extrusions into both markets decreased domestic billet demand. Due to the annual contract structure for billet in the U. Speaker 200:06:38S, we were somewhat insulated from this downturn in 2023 by higher annual contract prices set in late 2022. Unfortunately, demand conditions for billet in both the U. S. And Europe remained weak in Q4 and into Q1 of this year, which created a headwind in our 2024 billet contract negotiations and led to lower pricing that we expect will impact our Q1 results by around $10,000,000 from Q4 levels. Despite these near term headwinds, we continue anticipate very constructive long term billet demand trends in both the U. Speaker 200:07:15S. And Europe as automotive light weighting and renewable energy applications drive increasing aluminum consumption. We expect this trend to support significant long term demand expansion for primary aluminum billet and slab in the EU and U. S. In addition, as you can see on Slide 7, we expect that the pending U. Speaker 200:07:37S. Antidumping countervailing duty trade case against extrusion imports from 14 countries will have a significantly positive impact on domestic U. S. Billet demand beginning in the second half of twenty twenty four. In August, the U. Speaker 200:07:52S. Aluminum extrusion industry filed suit alleging dumping and illegal subsidies by countries constituting over 68% of extrusion imports and over 27% of total U. S. Extrusion demand. The U. Speaker 200:08:06S. International Trade Commission has already determined there's an indication of material injury to the U. S. Industry. And in March May of this year, the U. Speaker 200:08:15S. Department of Commerce is expected to rule on the preliminary implementation of antidumping and countervailing duties against the subject imports. If implemented, the duties would immediately go into effect and are expected to have a material impact on the U. S. Extrusion and billet markets. Speaker 200:08:35This is an example. When antidumping duties were first placed on aluminum extrusions from China in 2011, imports of subject extrusions from China immediately dropped almost 0 due to the significant relief provided by the antidumping and countervailing duties and the domestic industry accordingly took back significant market share. We would expect a similar impact from this case if duties are leveled in March May, meaning that 27% of domestic extrusion demand currently met by the subject imports would have to be served by increased U. S. Extrusion production and a corresponding increase in U. Speaker 200:09:11S. Billet demand. While we are not direct participants in the case, we have reviewed the case in detail and believe it is strong on the merits. If successful, the AD CBD duties would benefit spot bill of premiums in the second half of twenty twenty four, and we have accordingly left more of our second half bill of volumes open to potentially benefit from the higher pricing environment. The ADECVD duties would remain in place for at least 5 years, driving increased U. Speaker 200:09:41S. Billet demand across the period and beyond. Turning to operations, we saw strong and stable performance across our smelters in Q4, while the Jamalco refinery continued to recover from the energy related disruptions suffered in late September. We now expect that some of the production and cost efficiencies that we expected to do Jamalco in Q1 will instead begin in Q2. In Iceland, a relatively dry and cold winter has led to water levels in the nation's hydro scheme falling below normal levels and the energy companies have accordingly issued partial curtailment orders across their industrial customers, including our Grundartangi smelter. Speaker 200:10:23These curtailments first began in early December and are expected to reduce Grundartangi's energy consumption by approximately 20 megawatts, about 3% of our total load. We expect that the curtailment will finish by the end of April, but this remains subject to weather patterns reservoir levels in Iceland. Based on the scheduled curtailment in date, we expect that the curtailments will reduce Grundartangi's 2024 production by approximately 3,500 metric tons. This impact is included in our Q1 and full year volume guidance. It also impacted our Q4 production levels and you can see the impact in the volume column on our bridge on Page 9. Speaker 200:11:07Finishing out the energy picture, energy prices in the U. S. Have generally been constructive, driven by mostly moderate winter and natural gas near $2 A nationwide mid January cold snap did drive about a week of very high U. S. Power prices, which we expect to have a negative impact of about $5,000,000 in Q1. Speaker 200:11:31Other than this week of very cold weather, power prices have been very constructive and the power price forwards have fallen significantly since the cold snap, reflecting the low natural gas price. On the raw material side, we've begun to see many of our raw material imports begin to return towards historical pre pandemic price levels, with Coke, pitch and caustic soda prices moving most significantly downward over the past couple of months. Due to our contractual and physical inventory lags, the benefits of these price decreases will take some time to roll through our results, which Sherry will give you a bit more detail on. We do expect coke prices, especially, to continue to moderate further over the course of this year. Finally, in light of the currently suppressed demand environment, we've implemented a new cost control program designed to lower our spending while aluminum prices remain depressed. Speaker 200:12:27We of course have executed similar programs in the past and we are confident that we will be able to reduce costs and also our cash spending during this period. Dairy is leading this initiative for us and we'll provide you with the details. In light of this environment and long supply chains, we continue to work on our Mt. Holly restart plans, but do not expect that we will have any significant capital or cash requirements for the restart over the course of 2024. Jerry will now walk you through the quarter and our Q1 outlook. Speaker 300:13:01Thank you, Jesse. Let's turn to Slide 8 to review 4th quarter results. On a consolidated basis, 4th quarter global shipments were nearly 174,000 tons, up 1% sequentially. Realized prices, however, decreased substantially versus prior quarter due primarily to significantly lower lagged LME prices and delivery premiums, resulting in net sales of $512,000,000 a 6% decrease sequentially. Looking at Q4 operating results, adjusted EBITDA attributable to Centuri was $57,000,000 an improvement of $48,000,000 compared with the 3rd quarter. Speaker 300:13:43During the period, we recorded a full year benefit of $59,000,000 related to the Inflation Reduction Act, Advanced Manufacturing Credit Section 45X. Adjusted net income was $40,000,000 or $0.39 per share. The major adjusting items were add backs of $7,000,000 in costs related to the Jamalco equipment failure, $3,000,000 for the unrealized impacts of forward contracts and $1,000,000 for share based compensation. We had strong liquidity of $312,000,000 at the end of the quarter consisting of $89,000,000 in cash and $223,000,000 available on our credit facilities. Turning to Slide 9 to explain the $48,000,000 4th quarter sequential improvement in adjusted EBITDA. Speaker 300:14:32In total, adjusted EBITDA for the 4th quarter was $57,000,000 Realized lagged LME prices and delivery premiums were significantly lower in the quarter. Realized LME of 2,182 per ton was down $55 versus prior quarter, while realized U. S. Midwest premium of $4.25 per ton was down $68 and European delivery premium of $2.80 per ton was down $44 Together, these factors amounted to a $19,000,000 headwind in the quarter. Power cost increased by $1,000,000 Realized alumina cost was $3.82 per ton, dollars 13 lower on a sequential basis. Speaker 300:15:19Realized coke prices decreased 9% and realized pitch prices decreased 5%. Remember, there is a 3 to 4 month lag for alumina, coke and pitch cost to work through our income statement. Together, alumina and other raw material costs resulted in a $14,000,000 improvement in EBITDA. Volume OpEx and premiums mix were headwinds of $2,000,000 $3,000,000 respectively. And as I said earlier, during the period, we recorded a full year benefit of $59,000,000 related to the IRA Advanced Manufacturing Credit. Speaker 300:15:57For additional clarity, the IRA credit was calculated as 10% of production costs incurred, excluding direct and indirect material costs. Note, the Department of Treasury is still considering including direct and indirect material as eligible costs. Jesse will elaborate further in his closing remarks. With that, let's turn to Slide 10 for a look at cash flow. We began the quarter with $93,000,000 in cash and in December with $89,000,000 Capital expenditures totaled $30,000,000 $22,000,000 of which relates to the Grundartangi Cast House project. Speaker 300:16:36Semi annual interest payments were $13,000,000 and net debt repayments were $30,000,000 Working capital and other items contributed $68,000,000 We continue to maintain our focus on optimizing working capital, but as I mentioned last quarter, some of these savings are related to the timing of material flows, which may reverse in subsequent quarters. Let's turn to Slide 11, and I'll give you some insight into our expectations for the Q1 of 2024. For Q1, the lagged LME of $2,190 per ton is expected to be up about $8 versus Q4 realized prices. The Q1 lagged U. S. Speaker 300:17:18Midwest premium is forecast to be $4.16 per ton, down $9 The European delivery premium is expected at $2.22 per ton or down about $58 per ton versus the 4th quarter, but we have seen improvement in EDPP in recent weeks with pricing earlier this week at nearly $2.50 per ton. Taken together, the LME and delivery premium changes are expected to decrease Q1 EBITDA by approximately $2,000,000 versus Q4 levels. We expect power prices to be flat quarter over quarter despite a $5,000,000 negative impact from the January cold snap. Looking at our key raw materials, lagged realized alumina cost is expected to be about flat. We expect a favorable impact from lower coke and pitch prices. Speaker 300:18:11Caustic soda prices are trending down as I'd like to remind you that it takes 5 to 6 months for caustic spot prices to flow through our P and L. All in, we expect lower raw material cost to contribute $5,000,000 to $10,000,000 to EBITDA. The weak billet demand has driven value added premiums down. We therefore expect about a $10,000,000 VAP impact to EBITDA in Q1. We expect volume to be a slight headwind given the power curtailment imposed on the Grunder Tonge facility. Speaker 300:18:45Finally, we expect OpEx to contribute $5,000,000 to EBITDA in Q1. As Jesse highlighted in his opening comments, we have developed a robust playbook aimed at navigating the current demand landscape by effectively managing costs and preserving cash flow. We actively identify areas for efficiency enhancement, exercise prudence and discretionary expenditures and diligently pursue cost reduction initiatives, all in pursuit of establishing a sustainable and financially sound operational framework. All factors considered, our outlook for Q1 adjusted EBITDA is expected to be in a range of between $5,000,000 to $15,000,000 From a hedge impact standpoint, we expect no impact in the Q1 as we have very limited hedges in place. We expect tax expense of approximately $0,000,000 to $5,000,000 As a reminder, both of these items fall below EBITDA and impact adjusted net income. Speaker 300:19:47Now referring to Slide 17 for full year 2024 financial assumptions. We expect shipments to be flat compared to 2023. In line with our objective to conserve cash, we are managing spending very deliberately. We do expect to invest approximately $10,000,000 to $15,000,000 in sustaining CapEx and about $10,000,000 to $15,000,000 in Jamalco. In addition, investment of approximately $15,000,000 to $20,000,000 remains on our Ryerson cash house project, which will be funded in Q1 from our dedicated Gruner Tanguy cash house credit facility. Speaker 300:20:23The impact of the hedge book will vary with market conditions throughout the year. But to assist with anticipating these impacts on a go forward basis, we have updated our previously reviewed financial hedge landscape, which can be found on Page 19 in the appendix. Note, we have no remaining Nord Pool exposure in 2024. And now, I'll turn the call back over to Jesse. Speaker 200:20:49Thanks, Jerry. If you turn to Page 12, I'd like to finish with some additional discussion regarding Section 45X and our expected benefits thereunder. As we discussed in December, the proposed regulations clarified many aspects of the law, but Treasury asked for comments on several others, while specifically highlighting the important role that critical minerals like aluminum play in the renewable energy and energy storage industry. 1st and foremost, the proposed regulations confirm the application of Section 45X to essentially all of Century's primary aluminum production in the United States. The proposed regulations also clarified that eligible costs that qualify for the 10% credit are to be construed broadly to include all costs incurred by the producer in the production of the critical minerals other than certain direct and indirect material costs. Speaker 200:21:44Importantly, the Treasury Department also specifically notes that it is still considering adding direct and indirect material costs as eligible costs under Section 45X and requested comments regarding how such costs should be treated for purposes of the Critical Minerals Tax Credit. We are discussing with Treasury the essential nature of these materials and the significant associated costs as indeed it would not be possible to produce U. S. Aluminum without materials like alumina and carbon anodes. Our position is in line with a broad set of industry participants ranging from the critical mineral producers to our downstream customers, including automotive companies seeking to ensure stable domestic supply chains. Speaker 200:22:30Overall, there seems to be broad consensus amongst industry and consumers. Such costs should be eligible for the tax credit, and we are very hopeful that they will ultimately be included as eligible costs. Importantly, Senator Manchin, along with several of his colleagues, recently submitted comments to Treasury noting that their intent as drafters was for the direct and indirect material costs to be eligible, and they called on Treasury to expeditiously revise the regulations accordingly. If direct and indirect material costs are ultimately added to this eligible cost under 45x, we would expect to recognize an additional annual benefit $50,000,000 to $55,000,000 for 2023 and similar annual amounts for 2024 and going forward. Any potential increases in future production would also be eligible for the production tax credit and would be expected to increase our annual benefit on a roughly pro rata basis to the amount of increased production. Speaker 200:23:31We will continue to update you as we receive more guidance from the Treasury Department. We look forward to your questions today, and we'll turn the call over now to the operator. Operator00:24:09First question is from the line of Lucas Pipes with B. Riley. Your line is now open. Speaker 400:24:15Thank you very much, operator. Good afternoon, everyone. My first question is following up on the 45x commentary. And specifically, I understand there's a process for the review of the direct and indirect costs and including that in the benefit. But wondered if you could maybe elaborate on kind of what the process looks like from here. Speaker 400:24:43What's the potential timeline? What is the IRS looking for to make a determination on those? Thank you very much. Speaker 200:24:51Sure, Lucas. First of all, I'd just like to say we're very thankful for the program and the proposed regulations clearly have a material benefit for Sentry and also for U. S. Aluminum production. To your point on process, we are working with Treasury on the proposed regulations, which as I mentioned in my comments, included several questions for industry and other participants about which costs should be included as eligible. Speaker 200:25:20It's obviously been a lot of support coming in from industry and also from some of the drafters of the bill, which is obviously important to the ultimate intent of the law. So we do think there's good potential for more benefit to come, but it will obviously depend on the process. So these regulations, as we call them, are proposed regulations. And the process will be there's a comment period, which a number of comments have already been submitted. There also will be a hearing. Speaker 200:25:53And then after that, Treasury and the IRS will take that feedback back. And we'll also want to issue either another set of proposed regulation or set of final regulations. There is no prescribed timeline there. So we'll just have to wait and see when we see the next set of proposed or final regulations. Speaker 400:26:15Thank you. And do I remember it right that some of the hearings are tomorrow? And do you have a view on or do you know when the comment period might close? Thank you. Speaker 200:26:28Yes. The initial comment period is already closed, Lucas, and the hearing is in fact tomorrow. Speaker 400:26:37Very helpful. Thank you. And then I wanted to ask about Hawesville. I'm curious kind of if you could share your views on where that asset could sit on the U. S. Speaker 400:26:50Cost curve with lower energy prices more broadly with the 45x credit. There was a recent announcement about a curtailment of the smelter in the Midwest. So kind of curious what might be similar or different in Hawesville compared to that asset that's idled or maybe just again more broadly on the cost curve? Thank you. Thank you very much. Speaker 200:27:17Sure, Lucas. Good question. Yes, so we were very sad to see the announcement that the New Madrid smelter in New Madrid, Missouri closed earlier this year. But obviously, each and every smelter in the U. S. Speaker 200:27:33Has its own mix of costs and circumstances. And it's difficult to really make broad generalizations or comparisons across them. With respect to Hawesville specifically, we have obviously seen power prices in the Midwest return towards attractive levels, mainly driven by the low price of natural gas, but also as additional renewable energy is built in the grid. It's actually quite rewarding to see just how green the overall Midwest power environment has become. So with respect to Hawesville specifically, I think as we said before, it will be a holistic decision based on many factors. Speaker 200:28:21Obviously, the power price situation is helpful. And when we have final guidance on the IRA credits, that will also be very helpful towards making that decision. But we'll evaluate all factors at the time, including our corporate allocation capital, power supply, LME outlook and restart costs. Of course, our first priority, as we said before, will be restarting at Mount Holly. As I mentioned, we continue to work on that and make some progress. Speaker 400:28:55Thank you very much for that. I'll try to squeeze one quick one in on Jomalco. First, could you provide some color as to the contributions of Jamelco to Q1 EBITDA on an attributable basis? And then the $10,000,000 to $15,000,000 CapEx for 2024, is that kind of a good steady state number for your interest in the asset? Thank you. Speaker 200:29:26Yes. So obviously, as we continue to work on Jamalco and bringing it back to its full potential, which as I said before, we're quite confident over time, we will return the asset to producing in the 2nd quartile of the global cost curve. But we did have a few headwinds in Q4 and into Q1 when there were some delays in the restoration of some of its high efficiency boilers. And we continue to have a little instability coming out of the energy related disruptions we had towards the end of Q3. So we now expect some of those production and cost efficiencies that we've previously talked about to be achieved in Q2 rather than Q1. Speaker 200:30:12But we do expect Jamalco to be roughly breakeven on an EBITDA basis in Q1. Obviously, there's some of the quarter to go still. And then as we see the production efficiency improvements take hold, we think that EBITDA generation will improve in Q2 and beyond. Sorry, and then to your CapEx questions, Lucas. Yes, dollars 10,000,000 to $15,000,000 reflects some of those restoration projects that we have in place and the powerhouse that we've talked about before. Speaker 200:30:48So there's a little bit of mix of investment and sustaining CapEx in there, Lucas. So we'll just have to watch that and we'll continue to guide you as we go forward on that CapEx breakdown in future periods. Speaker 400:31:03I really appreciate all the color. I'll turn it over. Best of luck. Thank you. Speaker 200:31:09Thanks Lucas. Operator00:31:11Thank you for your question. Next question is from the line of John Tumazos with Very Independent Research. Your line is now open. Speaker 500:31:19Thank you. With spot natural gas well under $2 in the Henry Hub recently $0.025 How are long term electricity prices behaving? Have long term prices fallen? Is this an opportune time to contract wind or solar renewable energy from Mount Holly or Sebree? And if there ever was a time to think about Hawesville, I would think it's when natural gas is almost free. Speaker 200:32:12Thanks, John. It's a good question. Unfortunately, natural gas isn't quite free yet. I'll devise degree that would be a good environment. There's a few things going on in your question. Speaker 200:32:22So on Midwest and U. S. Power prices generally, putting aside the cold snap we had in January, they have been very constructive in the back half of last year and now certainly in the Q1 of this year, putting aside that brief week of very cold weather. So you've got the range right. You've seen them trading with low gas prices in the high-20s and low-30s over the balance of 2024. Speaker 200:32:57And you have seen the near part of the curve come in and reduce back towards sort of pre pandemic levels in the Midwest. On the renewable side, however, you continue to see renewable supply chains be very stretched and renewable prices remain well above pre pandemic pricing levels for renewables. So it's pretty dynamic out there. There's a lot of things going on. It's kind of hard to make broad generalizations of the overall energy environment. Speaker 200:33:32But certainly, it is a bit more constructive for Sebree as we continue to operate there. Speaker 500:33:41If I can ask another, with your 5% demand growth estimate for last year from China, does that mean Chinese exports fell last year? Speaker 200:33:57Yes. When you look at and you can sort of take a broader look and look at imports level, We saw about 1,300,000 tons of aluminum going into China. So the window was certainly open for most of the year. And largely that was based on very strong demand for EVs and renewable energy application within China. So then your corresponding question on exports is a bit more complex because you did see a lot of that demand go into not semis exports, which are easier to track, but more complete downstream demand applications. Speaker 200:34:43And it's a bit harder to say exactly. But what we can see is that the drivers or those long term demand drivers for aluminum we've long talked about, which is increasing aluminum intensity in electric vehicles and increasing aluminum intensity in renewable energy and renewable energy transmission applications. Speaker 500:35:07Thank you. Speaker 200:35:09Thanks, John. Operator00:35:13Thank you for your question. There are currently no further questions registered. There are no additional questions waiting at this time. So I'll pass the call back to the management team for any closing remarks. Speaker 200:35:33Okay. Thanks everyone for joining and we look forward to talking to you after Q1. Thanks a lot. Operator00:35:42That concludes the conference call. Thank you for your participation. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCentury Aluminum Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Century Aluminum Earnings HeadlinesCentury Aluminum Co (CENX) Announces First Quarter 2025 Earnings Release Date | CENX stock newsApril 24 at 5:13 PM | gurufocus.comCentury Aluminum's Long-Term Strategy Is Solid But Economic Uncertainty WeighsApril 24 at 8:12 AM | seekingalpha.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. April 26, 2025 | Golden Portfolio (Ad)Growth Without The Premium: 6 Value Stocks For AprilApril 16, 2025 | seekingalpha.comCentury Aluminum Co (CENX) Trading 3.56% Higher on Apr 14April 14, 2025 | gurufocus.comCentury Aluminum Is A Risky Bet On The Rebounding Of The US Aluminum IndustryApril 11, 2025 | seekingalpha.comSee More Century Aluminum Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Century Aluminum? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Century Aluminum and other key companies, straight to your email. Email Address About Century AluminumCentury Aluminum (NASDAQ:CENX) Company, together with its subsidiaries, engages in the production of standard-grade and value-added primary aluminum products in the United States and Iceland. It also owns and operates an alumina production facility in Iceland, and a carbon anode production facility in the Netherlands. 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There are 6 speakers on the call. Operator00:00:00Good afternoon. Thank you for attending the Century Aluminum Company 4th quarter 2023 earnings conference call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Ryan Crawford with Century Aluminum. Operator00:00:22Ryan, please go ahead. Thank you, operator. Speaker 100:00:25Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer Gary Bialik, Executive Vice President and Chief Financial Officer and Peter Trzypowski, Senior Vice President of Finance and Treasurer. After our prepared comments, we will take your questions. As a reminder, today's presentation is available on our website at www.centuryaluminum.com. We use our website as a means of disclosing material information about the company and for complying with Regulation FD. Speaker 100:01:04Turning to Slide 1, please take a moment to review the cautionary statements shown here with respect to forward looking statements and non GAAP financial measures contained in today's discussion. And with that, I'll hand the call to Jesse. Speaker 200:01:19Thanks, Ryan. Thanks to everyone for joining. I'll start today by quickly reviewing our 2023 performance before turning to the current macro environment and some dynamic operating conditions we are working through in Q1. Jerry will then take you through the details of the Q4 results and Q1 outlook, And then I'll finish with an update on the Inflation Reduction Act, potential further benefits that we expect to receive. Turning to Slide 3. Speaker 200:01:47Market conditions remain volatile last year, reflecting a seemingly new normal we've experienced post COVID, where a broadly balanced global supply and demand picture for aluminum is paired with historically low levels of inventories. Tight global inventories along with rising and dynamic geopolitical tensions has created a market where small changes in market conditions are driving outsized effects on aluminum prices. Despite this continued volatility, Centuri produced adjusted EBITDA of $120,000,000 in 2023, including $57,000,000 of adjusted EBITDA in Q4, reflecting the impact our 2023 Inflation Reduction Act Advanced Manufacturing Credit. Jerry will give you the full details here in a bit. Our team completed several strategic projects last year, including the acquisition of our 55% share in Jamalco, completing our long held ambitions to secure a captive supply of high quality alumina and bauxite for our smelters to create a more balanced, consistent and robust operational footprint and better position us to deliver strong performance through commodity cycles. Speaker 200:03:00Returning this asset to its full potential will continue to be one of our main priorities in 2024. Finally, we continue to focus on our most important priority to return our employees home safely at the end of each and every day. While we will never be satisfied until we achieve 0 workplace injuries, our team should be proud to have reduced injuries by 20% over 20 22 levels. We hope to significantly improve on this trend in the coming year. Market conditions for Century's businesses continue to reflect uncertain macroeconomic conditions in much of the world. Speaker 200:03:39As you can see on Slide 4, global supply and demand remain roughly balanced and global inventories remain near all time lows. The driving forces behind these balanced markets, however, are much more dynamic than years past and reflect the complexity of the current market. Supply was largely constrained over the past year. In China, growth was limited by their 45,000,000 ton capacity cap and continued curtailments in Yunnan and surrounding provinces. Western supply also remained challenged over the past year by a difficult demand picture that ultimately led to the curtailment of 2 more Western smelters in Neuss, Germany and New Madrid, Missouri. Speaker 200:04:23A bit further east, Russian metal continues to be disfavored in Western markets, where Russian metal today constitutes 90% of all LME inventories. There have been increasing calls for Russian aluminum sanctions in the EU and U. S. Following the initial implementation of a 200% tariff on Russian products into the U. S. Speaker 200:04:45And an EU ban on certain downstream Russian aluminum products into the EU. On the demand side, Western world demand appears to have reached a low in Q3, driven by continued destocking across downstream users and challenging EU industrial growth. The market saw increased demand in Q4 and we now expect an improved and growing Western demand Western demand equation in 2024. Overall, we expect that Western demand will return to its long term growth rates as falling interest rates and improved GDP growth returns to the U. S. Speaker 200:05:22And EU markets. And the Inflation Reduction Act and similar spending programs in the EU and elsewhere continue to drive increased aluminum demand in automotive and renewable energy applications. The largest demand side story in 2023, however, was the strength of the Chinese market, we saw Chinese demand growth of 5% in 2023 and expect to see similarly high growth rates this year. We estimate that the Chinese market imported about 1,300,000 tons of non Chinese production last year, and we expect that to expand further this year. Chinese demand growth has been driven by the broad macro trends we have long expected, namely in aluminum intensive electric vehicles and renewable energy applications. Speaker 200:06:12We expect demand growth in these areas to continue to accelerate this year, both in China and the West. As we have discussed over the course of the past year, build demand in the U. S. And Europe has been a relatively weak point in the market as post pandemic destocking continued and increased imports of extrusions into both markets decreased domestic billet demand. Due to the annual contract structure for billet in the U. Speaker 200:06:38S, we were somewhat insulated from this downturn in 2023 by higher annual contract prices set in late 2022. Unfortunately, demand conditions for billet in both the U. S. And Europe remained weak in Q4 and into Q1 of this year, which created a headwind in our 2024 billet contract negotiations and led to lower pricing that we expect will impact our Q1 results by around $10,000,000 from Q4 levels. Despite these near term headwinds, we continue anticipate very constructive long term billet demand trends in both the U. Speaker 200:07:15S. And Europe as automotive light weighting and renewable energy applications drive increasing aluminum consumption. We expect this trend to support significant long term demand expansion for primary aluminum billet and slab in the EU and U. S. In addition, as you can see on Slide 7, we expect that the pending U. Speaker 200:07:37S. Antidumping countervailing duty trade case against extrusion imports from 14 countries will have a significantly positive impact on domestic U. S. Billet demand beginning in the second half of twenty twenty four. In August, the U. Speaker 200:07:52S. Aluminum extrusion industry filed suit alleging dumping and illegal subsidies by countries constituting over 68% of extrusion imports and over 27% of total U. S. Extrusion demand. The U. Speaker 200:08:06S. International Trade Commission has already determined there's an indication of material injury to the U. S. Industry. And in March May of this year, the U. Speaker 200:08:15S. Department of Commerce is expected to rule on the preliminary implementation of antidumping and countervailing duties against the subject imports. If implemented, the duties would immediately go into effect and are expected to have a material impact on the U. S. Extrusion and billet markets. Speaker 200:08:35This is an example. When antidumping duties were first placed on aluminum extrusions from China in 2011, imports of subject extrusions from China immediately dropped almost 0 due to the significant relief provided by the antidumping and countervailing duties and the domestic industry accordingly took back significant market share. We would expect a similar impact from this case if duties are leveled in March May, meaning that 27% of domestic extrusion demand currently met by the subject imports would have to be served by increased U. S. Extrusion production and a corresponding increase in U. Speaker 200:09:11S. Billet demand. While we are not direct participants in the case, we have reviewed the case in detail and believe it is strong on the merits. If successful, the AD CBD duties would benefit spot bill of premiums in the second half of twenty twenty four, and we have accordingly left more of our second half bill of volumes open to potentially benefit from the higher pricing environment. The ADECVD duties would remain in place for at least 5 years, driving increased U. Speaker 200:09:41S. Billet demand across the period and beyond. Turning to operations, we saw strong and stable performance across our smelters in Q4, while the Jamalco refinery continued to recover from the energy related disruptions suffered in late September. We now expect that some of the production and cost efficiencies that we expected to do Jamalco in Q1 will instead begin in Q2. In Iceland, a relatively dry and cold winter has led to water levels in the nation's hydro scheme falling below normal levels and the energy companies have accordingly issued partial curtailment orders across their industrial customers, including our Grundartangi smelter. Speaker 200:10:23These curtailments first began in early December and are expected to reduce Grundartangi's energy consumption by approximately 20 megawatts, about 3% of our total load. We expect that the curtailment will finish by the end of April, but this remains subject to weather patterns reservoir levels in Iceland. Based on the scheduled curtailment in date, we expect that the curtailments will reduce Grundartangi's 2024 production by approximately 3,500 metric tons. This impact is included in our Q1 and full year volume guidance. It also impacted our Q4 production levels and you can see the impact in the volume column on our bridge on Page 9. Speaker 200:11:07Finishing out the energy picture, energy prices in the U. S. Have generally been constructive, driven by mostly moderate winter and natural gas near $2 A nationwide mid January cold snap did drive about a week of very high U. S. Power prices, which we expect to have a negative impact of about $5,000,000 in Q1. Speaker 200:11:31Other than this week of very cold weather, power prices have been very constructive and the power price forwards have fallen significantly since the cold snap, reflecting the low natural gas price. On the raw material side, we've begun to see many of our raw material imports begin to return towards historical pre pandemic price levels, with Coke, pitch and caustic soda prices moving most significantly downward over the past couple of months. Due to our contractual and physical inventory lags, the benefits of these price decreases will take some time to roll through our results, which Sherry will give you a bit more detail on. We do expect coke prices, especially, to continue to moderate further over the course of this year. Finally, in light of the currently suppressed demand environment, we've implemented a new cost control program designed to lower our spending while aluminum prices remain depressed. Speaker 200:12:27We of course have executed similar programs in the past and we are confident that we will be able to reduce costs and also our cash spending during this period. Dairy is leading this initiative for us and we'll provide you with the details. In light of this environment and long supply chains, we continue to work on our Mt. Holly restart plans, but do not expect that we will have any significant capital or cash requirements for the restart over the course of 2024. Jerry will now walk you through the quarter and our Q1 outlook. Speaker 300:13:01Thank you, Jesse. Let's turn to Slide 8 to review 4th quarter results. On a consolidated basis, 4th quarter global shipments were nearly 174,000 tons, up 1% sequentially. Realized prices, however, decreased substantially versus prior quarter due primarily to significantly lower lagged LME prices and delivery premiums, resulting in net sales of $512,000,000 a 6% decrease sequentially. Looking at Q4 operating results, adjusted EBITDA attributable to Centuri was $57,000,000 an improvement of $48,000,000 compared with the 3rd quarter. Speaker 300:13:43During the period, we recorded a full year benefit of $59,000,000 related to the Inflation Reduction Act, Advanced Manufacturing Credit Section 45X. Adjusted net income was $40,000,000 or $0.39 per share. The major adjusting items were add backs of $7,000,000 in costs related to the Jamalco equipment failure, $3,000,000 for the unrealized impacts of forward contracts and $1,000,000 for share based compensation. We had strong liquidity of $312,000,000 at the end of the quarter consisting of $89,000,000 in cash and $223,000,000 available on our credit facilities. Turning to Slide 9 to explain the $48,000,000 4th quarter sequential improvement in adjusted EBITDA. Speaker 300:14:32In total, adjusted EBITDA for the 4th quarter was $57,000,000 Realized lagged LME prices and delivery premiums were significantly lower in the quarter. Realized LME of 2,182 per ton was down $55 versus prior quarter, while realized U. S. Midwest premium of $4.25 per ton was down $68 and European delivery premium of $2.80 per ton was down $44 Together, these factors amounted to a $19,000,000 headwind in the quarter. Power cost increased by $1,000,000 Realized alumina cost was $3.82 per ton, dollars 13 lower on a sequential basis. Speaker 300:15:19Realized coke prices decreased 9% and realized pitch prices decreased 5%. Remember, there is a 3 to 4 month lag for alumina, coke and pitch cost to work through our income statement. Together, alumina and other raw material costs resulted in a $14,000,000 improvement in EBITDA. Volume OpEx and premiums mix were headwinds of $2,000,000 $3,000,000 respectively. And as I said earlier, during the period, we recorded a full year benefit of $59,000,000 related to the IRA Advanced Manufacturing Credit. Speaker 300:15:57For additional clarity, the IRA credit was calculated as 10% of production costs incurred, excluding direct and indirect material costs. Note, the Department of Treasury is still considering including direct and indirect material as eligible costs. Jesse will elaborate further in his closing remarks. With that, let's turn to Slide 10 for a look at cash flow. We began the quarter with $93,000,000 in cash and in December with $89,000,000 Capital expenditures totaled $30,000,000 $22,000,000 of which relates to the Grundartangi Cast House project. Speaker 300:16:36Semi annual interest payments were $13,000,000 and net debt repayments were $30,000,000 Working capital and other items contributed $68,000,000 We continue to maintain our focus on optimizing working capital, but as I mentioned last quarter, some of these savings are related to the timing of material flows, which may reverse in subsequent quarters. Let's turn to Slide 11, and I'll give you some insight into our expectations for the Q1 of 2024. For Q1, the lagged LME of $2,190 per ton is expected to be up about $8 versus Q4 realized prices. The Q1 lagged U. S. Speaker 300:17:18Midwest premium is forecast to be $4.16 per ton, down $9 The European delivery premium is expected at $2.22 per ton or down about $58 per ton versus the 4th quarter, but we have seen improvement in EDPP in recent weeks with pricing earlier this week at nearly $2.50 per ton. Taken together, the LME and delivery premium changes are expected to decrease Q1 EBITDA by approximately $2,000,000 versus Q4 levels. We expect power prices to be flat quarter over quarter despite a $5,000,000 negative impact from the January cold snap. Looking at our key raw materials, lagged realized alumina cost is expected to be about flat. We expect a favorable impact from lower coke and pitch prices. Speaker 300:18:11Caustic soda prices are trending down as I'd like to remind you that it takes 5 to 6 months for caustic spot prices to flow through our P and L. All in, we expect lower raw material cost to contribute $5,000,000 to $10,000,000 to EBITDA. The weak billet demand has driven value added premiums down. We therefore expect about a $10,000,000 VAP impact to EBITDA in Q1. We expect volume to be a slight headwind given the power curtailment imposed on the Grunder Tonge facility. Speaker 300:18:45Finally, we expect OpEx to contribute $5,000,000 to EBITDA in Q1. As Jesse highlighted in his opening comments, we have developed a robust playbook aimed at navigating the current demand landscape by effectively managing costs and preserving cash flow. We actively identify areas for efficiency enhancement, exercise prudence and discretionary expenditures and diligently pursue cost reduction initiatives, all in pursuit of establishing a sustainable and financially sound operational framework. All factors considered, our outlook for Q1 adjusted EBITDA is expected to be in a range of between $5,000,000 to $15,000,000 From a hedge impact standpoint, we expect no impact in the Q1 as we have very limited hedges in place. We expect tax expense of approximately $0,000,000 to $5,000,000 As a reminder, both of these items fall below EBITDA and impact adjusted net income. Speaker 300:19:47Now referring to Slide 17 for full year 2024 financial assumptions. We expect shipments to be flat compared to 2023. In line with our objective to conserve cash, we are managing spending very deliberately. We do expect to invest approximately $10,000,000 to $15,000,000 in sustaining CapEx and about $10,000,000 to $15,000,000 in Jamalco. In addition, investment of approximately $15,000,000 to $20,000,000 remains on our Ryerson cash house project, which will be funded in Q1 from our dedicated Gruner Tanguy cash house credit facility. Speaker 300:20:23The impact of the hedge book will vary with market conditions throughout the year. But to assist with anticipating these impacts on a go forward basis, we have updated our previously reviewed financial hedge landscape, which can be found on Page 19 in the appendix. Note, we have no remaining Nord Pool exposure in 2024. And now, I'll turn the call back over to Jesse. Speaker 200:20:49Thanks, Jerry. If you turn to Page 12, I'd like to finish with some additional discussion regarding Section 45X and our expected benefits thereunder. As we discussed in December, the proposed regulations clarified many aspects of the law, but Treasury asked for comments on several others, while specifically highlighting the important role that critical minerals like aluminum play in the renewable energy and energy storage industry. 1st and foremost, the proposed regulations confirm the application of Section 45X to essentially all of Century's primary aluminum production in the United States. The proposed regulations also clarified that eligible costs that qualify for the 10% credit are to be construed broadly to include all costs incurred by the producer in the production of the critical minerals other than certain direct and indirect material costs. Speaker 200:21:44Importantly, the Treasury Department also specifically notes that it is still considering adding direct and indirect material costs as eligible costs under Section 45X and requested comments regarding how such costs should be treated for purposes of the Critical Minerals Tax Credit. We are discussing with Treasury the essential nature of these materials and the significant associated costs as indeed it would not be possible to produce U. S. Aluminum without materials like alumina and carbon anodes. Our position is in line with a broad set of industry participants ranging from the critical mineral producers to our downstream customers, including automotive companies seeking to ensure stable domestic supply chains. Speaker 200:22:30Overall, there seems to be broad consensus amongst industry and consumers. Such costs should be eligible for the tax credit, and we are very hopeful that they will ultimately be included as eligible costs. Importantly, Senator Manchin, along with several of his colleagues, recently submitted comments to Treasury noting that their intent as drafters was for the direct and indirect material costs to be eligible, and they called on Treasury to expeditiously revise the regulations accordingly. If direct and indirect material costs are ultimately added to this eligible cost under 45x, we would expect to recognize an additional annual benefit $50,000,000 to $55,000,000 for 2023 and similar annual amounts for 2024 and going forward. Any potential increases in future production would also be eligible for the production tax credit and would be expected to increase our annual benefit on a roughly pro rata basis to the amount of increased production. Speaker 200:23:31We will continue to update you as we receive more guidance from the Treasury Department. We look forward to your questions today, and we'll turn the call over now to the operator. Operator00:24:09First question is from the line of Lucas Pipes with B. Riley. Your line is now open. Speaker 400:24:15Thank you very much, operator. Good afternoon, everyone. My first question is following up on the 45x commentary. And specifically, I understand there's a process for the review of the direct and indirect costs and including that in the benefit. But wondered if you could maybe elaborate on kind of what the process looks like from here. Speaker 400:24:43What's the potential timeline? What is the IRS looking for to make a determination on those? Thank you very much. Speaker 200:24:51Sure, Lucas. First of all, I'd just like to say we're very thankful for the program and the proposed regulations clearly have a material benefit for Sentry and also for U. S. Aluminum production. To your point on process, we are working with Treasury on the proposed regulations, which as I mentioned in my comments, included several questions for industry and other participants about which costs should be included as eligible. Speaker 200:25:20It's obviously been a lot of support coming in from industry and also from some of the drafters of the bill, which is obviously important to the ultimate intent of the law. So we do think there's good potential for more benefit to come, but it will obviously depend on the process. So these regulations, as we call them, are proposed regulations. And the process will be there's a comment period, which a number of comments have already been submitted. There also will be a hearing. Speaker 200:25:53And then after that, Treasury and the IRS will take that feedback back. And we'll also want to issue either another set of proposed regulation or set of final regulations. There is no prescribed timeline there. So we'll just have to wait and see when we see the next set of proposed or final regulations. Speaker 400:26:15Thank you. And do I remember it right that some of the hearings are tomorrow? And do you have a view on or do you know when the comment period might close? Thank you. Speaker 200:26:28Yes. The initial comment period is already closed, Lucas, and the hearing is in fact tomorrow. Speaker 400:26:37Very helpful. Thank you. And then I wanted to ask about Hawesville. I'm curious kind of if you could share your views on where that asset could sit on the U. S. Speaker 400:26:50Cost curve with lower energy prices more broadly with the 45x credit. There was a recent announcement about a curtailment of the smelter in the Midwest. So kind of curious what might be similar or different in Hawesville compared to that asset that's idled or maybe just again more broadly on the cost curve? Thank you. Thank you very much. Speaker 200:27:17Sure, Lucas. Good question. Yes, so we were very sad to see the announcement that the New Madrid smelter in New Madrid, Missouri closed earlier this year. But obviously, each and every smelter in the U. S. Speaker 200:27:33Has its own mix of costs and circumstances. And it's difficult to really make broad generalizations or comparisons across them. With respect to Hawesville specifically, we have obviously seen power prices in the Midwest return towards attractive levels, mainly driven by the low price of natural gas, but also as additional renewable energy is built in the grid. It's actually quite rewarding to see just how green the overall Midwest power environment has become. So with respect to Hawesville specifically, I think as we said before, it will be a holistic decision based on many factors. Speaker 200:28:21Obviously, the power price situation is helpful. And when we have final guidance on the IRA credits, that will also be very helpful towards making that decision. But we'll evaluate all factors at the time, including our corporate allocation capital, power supply, LME outlook and restart costs. Of course, our first priority, as we said before, will be restarting at Mount Holly. As I mentioned, we continue to work on that and make some progress. Speaker 400:28:55Thank you very much for that. I'll try to squeeze one quick one in on Jomalco. First, could you provide some color as to the contributions of Jamelco to Q1 EBITDA on an attributable basis? And then the $10,000,000 to $15,000,000 CapEx for 2024, is that kind of a good steady state number for your interest in the asset? Thank you. Speaker 200:29:26Yes. So obviously, as we continue to work on Jamalco and bringing it back to its full potential, which as I said before, we're quite confident over time, we will return the asset to producing in the 2nd quartile of the global cost curve. But we did have a few headwinds in Q4 and into Q1 when there were some delays in the restoration of some of its high efficiency boilers. And we continue to have a little instability coming out of the energy related disruptions we had towards the end of Q3. So we now expect some of those production and cost efficiencies that we've previously talked about to be achieved in Q2 rather than Q1. Speaker 200:30:12But we do expect Jamalco to be roughly breakeven on an EBITDA basis in Q1. Obviously, there's some of the quarter to go still. And then as we see the production efficiency improvements take hold, we think that EBITDA generation will improve in Q2 and beyond. Sorry, and then to your CapEx questions, Lucas. Yes, dollars 10,000,000 to $15,000,000 reflects some of those restoration projects that we have in place and the powerhouse that we've talked about before. Speaker 200:30:48So there's a little bit of mix of investment and sustaining CapEx in there, Lucas. So we'll just have to watch that and we'll continue to guide you as we go forward on that CapEx breakdown in future periods. Speaker 400:31:03I really appreciate all the color. I'll turn it over. Best of luck. Thank you. Speaker 200:31:09Thanks Lucas. Operator00:31:11Thank you for your question. Next question is from the line of John Tumazos with Very Independent Research. Your line is now open. Speaker 500:31:19Thank you. With spot natural gas well under $2 in the Henry Hub recently $0.025 How are long term electricity prices behaving? Have long term prices fallen? Is this an opportune time to contract wind or solar renewable energy from Mount Holly or Sebree? And if there ever was a time to think about Hawesville, I would think it's when natural gas is almost free. Speaker 200:32:12Thanks, John. It's a good question. Unfortunately, natural gas isn't quite free yet. I'll devise degree that would be a good environment. There's a few things going on in your question. Speaker 200:32:22So on Midwest and U. S. Power prices generally, putting aside the cold snap we had in January, they have been very constructive in the back half of last year and now certainly in the Q1 of this year, putting aside that brief week of very cold weather. So you've got the range right. You've seen them trading with low gas prices in the high-20s and low-30s over the balance of 2024. Speaker 200:32:57And you have seen the near part of the curve come in and reduce back towards sort of pre pandemic levels in the Midwest. On the renewable side, however, you continue to see renewable supply chains be very stretched and renewable prices remain well above pre pandemic pricing levels for renewables. So it's pretty dynamic out there. There's a lot of things going on. It's kind of hard to make broad generalizations of the overall energy environment. Speaker 200:33:32But certainly, it is a bit more constructive for Sebree as we continue to operate there. Speaker 500:33:41If I can ask another, with your 5% demand growth estimate for last year from China, does that mean Chinese exports fell last year? Speaker 200:33:57Yes. When you look at and you can sort of take a broader look and look at imports level, We saw about 1,300,000 tons of aluminum going into China. So the window was certainly open for most of the year. And largely that was based on very strong demand for EVs and renewable energy application within China. So then your corresponding question on exports is a bit more complex because you did see a lot of that demand go into not semis exports, which are easier to track, but more complete downstream demand applications. Speaker 200:34:43And it's a bit harder to say exactly. But what we can see is that the drivers or those long term demand drivers for aluminum we've long talked about, which is increasing aluminum intensity in electric vehicles and increasing aluminum intensity in renewable energy and renewable energy transmission applications. Speaker 500:35:07Thank you. Speaker 200:35:09Thanks, John. Operator00:35:13Thank you for your question. There are currently no further questions registered. There are no additional questions waiting at this time. So I'll pass the call back to the management team for any closing remarks. Speaker 200:35:33Okay. Thanks everyone for joining and we look forward to talking to you after Q1. Thanks a lot. Operator00:35:42That concludes the conference call. Thank you for your participation. You may now disconnect your lines.Read morePowered by