NASDAQ:CENX Century Aluminum Q4 2024 Earnings Report $16.88 -0.37 (-2.17%) As of 10:43 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast Century Aluminum EPS ResultsActual EPS$0.47Consensus EPS $0.42Beat/MissBeat by +$0.05One Year Ago EPS$0.39Century Aluminum Revenue ResultsActual Revenue$631.00 millionExpected Revenue$515.27 millionBeat/MissBeat by +$115.73 millionYoY Revenue GrowthN/ACentury Aluminum Announcement DetailsQuarterQ4 2024Date2/20/2025TimeBefore Market OpensConference Call DateThursday, February 20, 2025Conference 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 2024 Earnings Call TranscriptProvided by QuartrFebruary 20, 2025 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good afternoon. Thank you for attending today's Century Aluminum Company Fourth Quarter twenty twenty four Earnings Conference Call. My name is Shayla, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I'd now like to turn the conference over to our host, Ryan Crawford. Operator00:00:18Ryan, you may proceed. Speaker 100:00:22Thank you, operator. Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer Jerry Bialik, Executive Vice President and Chief Financial Officer and Peter Trepkovski, 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. Speaker 100:00:53We use our website as a means of disclosing material information about the company and for complying with Regulation FD. Turning to Slide one, 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 200:01:16Thanks, Ryan, and thanks to everyone for joining. I'll start today by quickly reviewing our full year 2024 performance before discussing our Q4 performance and the strong market conditions we are experiencing so far in 2025. Gerry will then take you through the details of the results and our first quarter outlook, and then I'll finish with a discussion of the recent U. S. Section two thirty two tariff announcements before turning the call over for questions. Speaker 200:01:43Century produced strong results in 2024, generating adjusted EBITDA of $245,000,000 for the year and $82,000,000 for the fourth quarter. Overall, strong realized aluminum prices, both at the LME and regional premium level and low energy prices, drove increased profitability in the fourth quarter. Aluminum prices averaged $2,575 for the quarter and rose further in Q1 to date with spot LME trading above $2,700 and Midwest Premium trading near $0.39 today. Turning to Slide four. IndiHub power prices continued to be attractive in Q4 as a mild start to winter kept natural gas and power prices low. Speaker 200:02:29Cold snaps in January and February have led to higher U. S. And European gas and energy prices so far in 2025, and we have experienced some of this normal seasonality in our power prices at Seabree in the first quarter. Turning to Page five. As you can see in the top left graph, strong global demand and continued constraints on new global supply is expected to move the global market into deficit by over 600,000 tonnes in 2025. Speaker 200:02:58Global aluminum supply remains challenged with China approaching its 45,000,000 tonne production cap and Limited announced new projects outside of China. We believe demand growth will continue to outpace supply in 2025 and for years to come. With inventories again at multiyear lows of forty nine days, Western demand growth in 2025 should be supportive of higher aluminum prices as we move forward in the year and inventories continue to deplete. Alumina supplies also remained tight in Q4, driving API alumina prices to all time highs in late November and early December. Alumina prices have retreated somewhat in 2025 with spot API trading today around $5.00 $5 Our Germanalco acquisition and LME linked commercial contracts continue to serve us well during this period of alumina price volatility. Speaker 200:03:57During Q4, '1 of our major alumina suppliers declared a force majeure, which reduced deliveries under one of our supply contracts and required us to procure some spot API alumina in Q4. Fortunately, we were able to reach a financial settlement with the supplier that fully offset the additional costs of these spot cargos. Please just note that the $12,000,000 benefit from the financial settlement was booked in Q4, while the offsetting one time costs associated with the replacement material will not roll through our results until Q1 due to FIFO accounting. Just to wrap this up, the FM was limited to Q4 and we do not expect any further impact from this beyond Q1. You can continue to use our 50% JAMALCO and fixed and 50% LME linked alumina sensitivity numbers for Q2 and beyond. Speaker 200:04:53On Page six, you can see our other raw material price inputs continue to be constructive, but we did see some uptick in coking pitch prices as we enter 2025. Caustic prices and HFO continue to be at levels that are very constructive for Chamelco. Turning to operations. Across the company, our assets continue to deliver strong operating results into year end. Starting with Seabree, twenty twenty four represented one of the smelter's finest operating years ever, delivering strong results across their operating KPIs. Speaker 200:05:25We are very proud of the fine assets that the team has created there. Mount Holly did suffer some minor operational instability in Q4 as an excursion on the carbon side of the business increased operating costs and drove slightly lower production across the plant. The management team there has this issue well in hand, and we expect the plant to return to normal performance over the course of Q1. At Grunder Tongji and Jamalco, the respective teams delivered excellent operating quarters. And Jamelco notably is off to a very strong start to 2025 with January production at the highest monthly level since we purchased the plant. Speaker 200:06:05The Jamelco team continues to focus on improvement, both through operational optimization and execution of our multiyear CapEx program that will aim to increase production at Jamalco towards 1,400,000 tonnes of capacity. In Q4, the Jamalco team took action to right size its workforce by implementing a 5% reduction in the plant's headcount. This step was necessary to lower the plant's labor expense and increase productivity and continues our progress towards Jamalco's goal of producing in the second quartile of the cost curve. Our evaluation process at Hassel made good progress with strong interest and lots of due diligence ongoing. We will keep you updated on progress here as we move through the year. Speaker 200:06:52Wrapping up with some very good news out of Iceland. Recent rainfall and stronger than expected snowmelt has improved reservoir levels in the hydropower schemes on the island. Given these improved reservoir levels, the National Power Company ended the power curtailments to Grundratongi in mid February. The curtailments had originally been expected to last through May. The plant is now in the process of restoring operations to full production, which will have a partial benefit in Q1 and should result in full production levels for Green Gutongi in Q2. Speaker 200:07:25The positive financial impact of the additional production is included in our outlook on Page 10 in our full year volume guidance that is included later in this presentation. Gerry will now walk you through the details on the quarter and our Q1 outlook. Speaker 300:07:42Thank you, Jesse. Let's turn to Slide seven to review fourth quarter results. On a consolidated basis, fourth quarter global shipments were approximately 167,000 tonnes, slightly lower than last quarter due primarily to year end cut off timing of shipments. Net sales for the quarter were $631,000,000 an increase of 92,000,000 sequentially. This was driven by higher third party aluminum sales volume along with higher aluminum prices and regional premiums. Speaker 300:08:16Adjusted net income was $46,000,000 or $0.49 per share. The main adjusting items were add backs of $5,000,000 for share based compensation and $2,000,000 for lower of cost or net realizable value on inventory, partially offset by a $6,000,000 deduction for the unrealized impact of forward derivative contracts. Looking at Q4 operating results, adjusted EBITDA attributable to Centuri was $82,000,000 Liquidity was $245,000,000 to end the fourth quarter. This consisted of $33,000,000 in cash and $212,000,000 available on our credit facilities. Our liquidity position remains near target range but decreased last quarter primarily due to working capital dynamics within Alumina Sourcing. Speaker 300:09:10Turning to Slide eight to explain fourth quarter sequential improvement and adjusted EBITDA on a normalized basis. As a reminder, the Treasury Department published final 45x rules addressing carbon and other operating supplies in Q3. As a result, we recorded an incremental tax credit to true up the full year 2023 and year to date 2024 periods in the third quarter. Normalized adjusted EBITDA for the fourth quarter improved $9,000,000 to $82,000,000 Realized LME of $2,462 per ton was up $11 versus prior quarter. While realized U. Speaker 300:09:52S. Midwest premium of $436 per ton was up $15 and European delivery premium of $341 per tonne was up $6 Together, higher metal prices and regional premiums contributed an incremental $4,000,000 compared with prior quarter. We also realized favorable energy costs adding $2,000,000 of EBITDA. In addition, as Jesse discussed, we recorded a $12,000,000 benefit after reaching a settlement with an external alumina supplier regarding a force majeure supply disruption in Q4. These benefits were partially offset by unfavorable other raw material costs of $3,000,000 and higher operating spend at Mount Holly, a headwind of $5,000,000 With that, let's turn to Slide nine for a look at cash flow. Speaker 300:10:46We began the quarter with $33,000,000 in cash. Adjusted EBITDA contributed $82,000,000 Increased borrowings of $42,000,000 was used to support the working capital build. Capital expenditures totaled $13,000,000 Interest and taxes were $14,000,000 and $9,000,000 respectively. The force majeure settlement was recorded in adjusted EBITDA for the fourth quarter. But as Jesse already noted, the offsetting cost will run through inventory in Q1. Speaker 300:11:19Finally, the regular 45x tax credit booked in the quarter increased the tax credit receivable on our balance sheet until direct cash payments from the federal government are received. Through December 31, we have a 45x receivable of $152,000,000 related to full year 2023 and 2024 operations. At the end of quarter four, we had $33,000,000 in cash. Let's turn to Slide 10 for Insight's indoor expectations for the first quarter of twenty twenty five. For Q1, the lagged LME of $2,575 per tonne is expected to be up about $113 versus Q4 realized prices. Speaker 300:12:03The Q1 lagged U. S. Midwest premium is forecast to be $600 per tonne, up $165 Remember, the realized Midwest premium is on an approximately one month lag, so the recent significant premium increase will be reflected primarily in Q2 results. The European delivery premium is expected at $345 per tonne or up about $5 per tonne versus the fourth quarter. Taken together, the lagged LME and delivery premium changes are expected to have a $35,000,000 to $40,000,000 increase to Q1 EBITDA compared with Q4 levels. Speaker 300:12:43Normal seasonality will impact power prices and should be an approximate $15,000,000 EBITDA headwind in Q1 after a mild start to winter in Q4. We expect carbon and other material prices to increase by $5,000,000 The force majeure notice from one of our alumina suppliers caused us to purchase some alumina cargos at spot prices during Q4. The additional cost of these cargos was fully offset by a $12,000,000 financial settlement that we reached with our supplier in Q4. Note the benefit of the financial settlement was realized in Q4, but due to FIFO accounting, the higher cost of the cargos will flow through our results in Q1. So while we are showing a one time $10,000,000 to $15,000,000 aluminum headwind in Q1, the impact of this was really offset by the financial settlement rerecorded in Q4. Speaker 300:13:36To be clear, we do not expect this will repeat in Q2 or beyond. We will incur approximately $5,000,000 of higher OpEx from pot reline costs to return to full pot complement at Grunder Tonge and trailing restructuring costs associated with the Jamaco workforce changes. Volume and mix will add an incremental $10,000,000 benefit. All factors considered, our outlook for Q1 adjusted EBITDA is expected to be in a range between $75,000,000 to $85,000,000 As previously discussed, this outlook does not include the full quarter impact of the significant increase in Midwest Regional Premium since the announcement of the revised Section two thirty two tariffs. Using the sensitivities provided in our appendix, you can see that this will have a significant effect on the profitability of our U. Speaker 300:14:27S. Business with each $0.01 of increase in Midwest Premium equating to an additional $9,000,000 of EBITDA on an annualized basis. When you apply that to the nearly $0.2 increase we have already experienced since Q4, you can see the material impact of this action on our American operations. Please just remember that due to our contractual pricing agreements, Midwest premium will run through our financial results on a one month lag, which means the vast majority of the benefit from the increased Section two thirty two tariffs will not hit our financial results until Q2. Now referring to Slide 11 for the full year 2025 financial assumptions. Speaker 300:15:09We expect shipments to improve to 700,000 tons in 2025 as all plants operate at targeted utilization levels. We expect to spend approximately $45,000,000 to $50,000,000 in sustaining CapEx. This is in line with historical sustaining CapEx for the smelter assets and now includes JAMALCO. We also plan to invest $25,000,000 to $30,000,000 in various projects across the asset base that meet or exceed our return threshold. The investment CapEx will focus on improving operating efficiencies at JAMALCO and our current U. Speaker 300:15:44S. And European facilities. The 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 16 in the appendix. With that, I will hand the call back to Jesse. Speaker 200:16:05Thanks, Jerry. Turning to Slide 12, I'd like to end the prepared portion of our call by thanking President Trump for so quickly taking action to strengthen the Section two thirty two tariffs on aluminum. When President Trump originally created the Section two thirty two program in 2018, it allowed The U. S. Aluminum industry to steady itself and begin to invest again in U. Speaker 200:16:27S. Production. We were proud to do our part as we invested in U. S. Production and became the largest producer of primary aluminum in The United States. Speaker 200:16:38Unfortunately, after President Trump left office, the effectiveness of the program was degraded through a number of country exemptions that allowed foreign producers to bypass the program and even increase their imports to all time high levels, including imports from exempted countries increasing by over 25% since 2018. Effective March 12, President Trump's actions will restore the original effectiveness of the Section two thirty two program by revoking all country and product exemptions and raising the tariff rate from 10% to 25%. The effects of President Trump's action is beginning to be reflected in the Midwest premium, which has already risen from the $0.2 we realized in Q4 to $0.39 spot today. We believe that the Midwest premium has room to increase further following the effective date of the program in March. As the largest producer of primary aluminum in The United States, Century is doing its part to build and secure the aluminum production that is so essential to U. Speaker 200:17:40S. National security needs. When complete, our new smelter project will represent the first new smelter built in The U. S. In fifty years and will double the size of the existing U. Speaker 200:17:51S. Industry. The New Century Smelter will build on our leading market position to fulfill the ever growing strategic need for a secure American supplier of cutting edge primary aluminum alloys and value added products. The New Century Smelter will also provide our U. S. Speaker 200:18:08Customer base with a secure domestic source of military grade primary aluminum as well as a full suite of value added products produced with best in class technology. The new smelter will create over 1,000 full time direct jobs and over 5,500 construction jobs here in The United States. We continue to make good progress on the project, having completed the second phase of engineering work and nearing completion of site selection and energy supply negotiations. We are grateful to President Trump and his administration for recognizing the vital importance of a strong domestic primary aluminum industry to U. S. Speaker 200:18:45National security. These actions will help to underpin further investment in our industry, strengthen domestic supply chains and ensure The U. S. Industry will be able to meet U. S. Speaker 200:18:55Needs for this critical mineral. With that, we are ready for your questions and we'll turn the call over now to the operator. Operator00:19:30Our first question comes from Nick Giles with the company B. Riley. Nick, your line is now open. Speaker 400:19:38Thank you very much, operator, and good afternoon, everyone. Guys, congrats on all the progress here as of late. My first question is, you noted that the more recent rise in Midwest premiums won't be reflected until 2Q. And so I was wondering if you could help bridge us to your earnings power in the current environment. I believe Midwest premium in your 1Q guide versus spot today could imply an annual impact of around $100,000,000 So, I wanted to confirm that and see how we might think about other moving parts. Speaker 400:20:11Thanks a lot. Speaker 200:20:14Yes. First, Nick, congrats on the new role. Glad to have you covering us and look forward to working with you. Second, good question. So yes, where we've seen Midwest go maybe just to start with, so far, we've seen Midwest go from the $0.2 we realized in Q4 to the $0.39 we're seeing in spot today. Speaker 200:20:38And in our Q1 outlook, we've assumed a realized Midwest premium of $0.27 So, if you take it to spot, you're right in the ballpark where that could be. And ultimately, we think that Midwest premium will go higher. We don't think it's fully reflecting, the value of the tariff, today. And we could see another $0.05 to $0.1 upside to what you see today. So if you take that altogether, you could see about $0.2 upside from where we are today, call it $0.2 to $0.25 from what we've assumed in the Q1 guide. Operator00:21:22Excuse Speaker 200:21:25me, sorry, $0.2 to $0.25 from what we realized in Q4, looking somewhere in the $0.45 to $0.5 range on a measured basis. Speaker 400:21:38Got it. Got it. Jesse, I really appreciate that. And maybe as a follow-up, I was hoping to get an update on how you're viewing a potential Mount Holly restart given current Midwest premiums and the implication of $2.32 tariffs. And then I had the same question for Hawesville. Speaker 400:21:58Has this impacted your ongoing strategic process? Thanks a lot. Speaker 200:22:04Yes, sure. Great question, Nick. So, obviously, since the announcement, which was just last week, we have been updating our analysis at Mount Holly. Obviously, the tariff program is extremely constructive for the smelter. As we mentioned, we did experience a little instability in the operations in Q4. Speaker 200:22:22That will get cleaned up over Q1. And we also see continued high spot outlet prices. Those should also come down. So we'll continue to update you, but we're definitely moving in the right direction for a restart at Nahalley. The Hudsville price list continues, valuation ongoing. Speaker 200:22:43We've seen strong continued interest, in the site. But obviously, we'll continue to look at the new environment as we make a decision of what to do there. But as we've said before, I think first to come will be at Nalholland restart and then we'll go from there. Speaker 400:23:04Got it. That's good to hear. Maybe one more if I could. Maybe a more point of clarification. The 1Q guide is almost taking a double hit from the non recurring settlement plus the Illumina spot purchase given the lags as you outlined? Speaker 400:23:19And is it fair to assume that this kind of negative $10,000,000 to $15,000,000 hit will reverse in 2Q? Or am I thinking about that wrong? Speaker 200:23:31No, you're absolutely right, Nick. And there's just a little bit of accounting noise running through that. There's a couple of ways of looking at it. One, if instead of booking the financial settlement in Q4, you book that in Q1, you actually wouldn't see a headwind in the outlet price in Q1. Those do fully offset, as Gerry said. Speaker 200:23:50And secondly, you're completely correct. You won't see that repeat in Q2. So that should all come back in Q2. Speaker 400:24:02Guys, I really appreciate all the color. So, again, congrats on the progress and continued best of luck. Speaker 200:24:10Thanks, Nick. Operator00:24:12Next question comes from Katrinik with the company BMO. Katrinik, your line is now open. Speaker 500:24:19Hi. Thank you for taking my questions. Maybe going back to Mount Holly, if you do decide to restart it, how long it would take you and what would the investment needed be? Speaker 200:24:33Yes. So we're updating all that analysis, Katya, as I said, since the news came last week. As we've said before, you're probably looking at somewhere around a nine month timeline from decision to restart, somewhere in that range. And we'll give you an update on the cost of a restart once we make that decision and announce the Speaker 600:24:57restart. Maybe Speaker 500:24:59if I remember correctly, when you were restarting the potline at the hospital a few years ago, did it cost about $45,000,000 to $50,000,000 per potline? Am I remembering that correctly? Speaker 200:25:14Yes, that's not exactly what it was. But again, there's obviously been a lot of changes, since 2018 when those restarts were done for about seven years down the line. So, we'll just go ahead and give you that full analysis once we've made the decision, at Mount Holly. Speaker 500:25:33And maybe, you know, you mentioned the new smelter, you're making progress there. And I know that this is a multiyear type of project, but can you talk a bit more about how much it would actually cost to build a new smelter in U. S? Speaker 200:25:51Yes. We have made really good progress on the new smelter. We've in January, we finished up the process to finalize the terms of the award and went formally under award with the Department of Energy for the $500,000,000 grant that we've talked about before. We've also finished up the second phase of engineering work for the project. And really, the next step for the project will be to finalize the energy contract negotiations and site selection, which is ongoing today. Speaker 200:26:26And we'd expect that gets done, you know, by the end of Q2 or so. So, we'll give you a further update on that project after we've made that finished that work and made a decision to move forward into the next step. Speaker 600:26:44Okay. Thank you. Operator00:26:51The next question comes from Timah Sanders with the company Wolfe Research. Timah, your line is now open. Speaker 600:26:58Hi, good evening. I wanted to kind of hit back on some Speaker 500:27:01of the topics that have been Speaker 600:27:02closed on. Hey there. So I guess to circle back on Hassell, just the one sentence in your prepared remarks that made me wonder, is there less conviction on that process? Do you have anything in terms of timing or progress that you can update us on? And just to circle back, it is possible that it restart? Speaker 600:27:25Or are you pursuing this alternative, 100%? Thank you. Speaker 200:27:32Not at all. No nothing to read into that update other than the process continues to be going well. Very strong continued interest in the site and lots of people doing due diligence. As I said on the last call, it is a complicated process, and it's a little bit different than some of the other transactions that you've seen done in the space. We're here. Speaker 200:27:55We're going from an industrial site to a potential different use case. And as you might imagine, given the capital scale of what a potential purchaser would be looking at, they want to do their due diligence first. And so that's really ongoing. Process is still going well. And we'd expect to continue to keep you updated. Speaker 200:28:12To the second part of your question, Tim, what we said all along is we will always measure whatever comes out of this process versus the potential value of the site under our restart scenario. And obviously, the recent actions will help the second part of that that analysis. So we'll just go ahead and and pursue the process. And once we've finished it, we'll give everyone an update. But, nothing to read into. Speaker 200:28:39Process continues to go well. And we're excited about it. Speaker 600:28:44Okay. That's great. Appreciate the additional color. Also really enjoy the industry environment forecast that you have here for Midwest premium, staying high alumina prices, those are helpful. In the assumption here with that, that does include a 25% Section two thirty two effectiveness on March 12. Speaker 600:29:06But is there any assumption of an additional tariff on Canada? Is that in your thought process of what could play out going forward with that debate? I guess that dialogue is ongoing. Speaker 200:29:21Yes. We continue to watch that dialogue as well. And just to be clear, that's not included either in our guidance or sort of my views on where Midwest premium can go that I gave when we were speaking to Nick earlier. So, again, we think fundamentally if the 25% tariff goes on, you'll see a Midwest premium somewhere in the $0.45 to $0.5 range. And that does not include any other additional tariffs that may come. Speaker 600:29:51Okay, helpful. And then last one from me. Jamalco, you've been talking about expanding in this alumina environment. That sounds great. And I think that would be part of the support for Matt Hawley. Speaker 600:30:02So just want to make sure I'm thinking about that properly. Have you talked about the capital cost and timing for that expansion? Speaker 200:30:13Yes, we have. And just to remind but just to remind you, so the investment CapEx at Jamalco, we estimate will be somewhere in the $50,000,000 to $20,000,000 range in 2025. You'll probably see a similar range in 2026 as we continue to invest in projects that are needed to bring that production capacity back up. And that's included in the investment CapEx that's in the back of our deck. Speaker 600:30:47But is that part of the process of thinking about the Mount Holly restart is to secure that additional alumina capacity or are they not necessarily linked? Speaker 200:30:57They're not necessarily linked. We can secure that in the marketplace, Timna. But of course, as we look to keep our book balanced, we're excited to have that additional production within our portfolio. Speaker 600:31:11Okay. Many thanks. Operator00:31:18Our next question comes from John Tumazos with the company, Very Independent Research. John, your line is now open. Speaker 700:31:29Thank you. Today, the International Aluminum Institute reported record daily global output, up 2.5%. And with inventories falling, it implies about a 3.5% demand growth rate in the early part of this year. And last year's apparent demand growth rate was about the same 3.5%. Do you think demand is growing that rapidly? Speaker 700:32:04And or do you think that there is some inventory building maybe because of alumina worries, less Russia exports, less China exports, maybe lower interest rates encourage some restocking or some tariff uncertainties? Speaker 200:32:25No, John. We really haven't seen any evidence of any sort of shadow stockpiling, if you will, if that's sort of what the question is. We think that forty nine day number has been very stable, and you continue to see that tick down over the past several quarters. And we do think that I can't speak to IAI's exact numbers, but I think the ballpark that you gave and the analysis there is largely correct. As I said in my prepared remarks, we think aluminum demand will outpace aluminum supply growth over the next several years for sure. Speaker 700:33:05I could follow-up. The IAI reported a record Chinese output for January, '1 hundred and '20 thousand '6 hundred and '40 '5 tons a day. And it used to be that they would cut output in the winter to reduce urban pollution, but they've migrated and changed their energy sources a little bit. How do you interpret the Chinese output at a record in the middle of the winter? And with 6,000,000 tons of alumina capacity being idled, should we adjust that 45,000,000 tonne cap to 48,000,000 or 50,000,000? Speaker 200:33:54No, absolutely not, John. I think both our view and I think widely the marketplace view is that the Chinese are respecting the 45,000,000 tonne cap, and we would expect that will be where it goes going forward. And I think one thing that hasn't been talked about a lot, but the decision, back in the fall to eliminate the VAT rebate on export, will is actually a sign of their intention to recognize that 45,000,000 ton cap. So, in other words, as they look to meet their own downstream demand, they're going to keep all those semi products within China that used to leave. So, we view those as actually very supportive of the 45,000,000 tonne cap and really bolsters and supports that that's the intention of the Chinese government. Speaker 200:34:46Of course, we'll see, but that's our view for now. Speaker 700:34:50Thank you. Operator00:34:57At this time, there are no more questions registered in queue. There are no more questions registered in the queue. I'd like to pass the conference back over to our hosting team for closing remarks. Speaker 200:35:17Okay. Thanks everyone for joining the call. We're really excited about what's to come in 2025 for Century. We think the market sets up very well for our company and we're glad to continue our role that we play both in The United States and Europe in producing aluminum that's needed. Thank you very much. Speaker 400:35:36Talk to Speaker 200:35:36you next quarter. Operator00:35:39That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCentury Aluminum Q4 202400:00 / 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.comTrump Treasure April 19Thanks to President Trump… A $900 investment across5 specific cryptos… Could gain 12,000% so quickly that, just 12 months later…April 25, 2025 | Paradigm Press (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 8 speakers on the call. Operator00:00:00Good afternoon. Thank you for attending today's Century Aluminum Company Fourth Quarter twenty twenty four Earnings Conference Call. My name is Shayla, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I'd now like to turn the conference over to our host, Ryan Crawford. Operator00:00:18Ryan, you may proceed. Speaker 100:00:22Thank you, operator. Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer Jerry Bialik, Executive Vice President and Chief Financial Officer and Peter Trepkovski, 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. Speaker 100:00:53We use our website as a means of disclosing material information about the company and for complying with Regulation FD. Turning to Slide one, 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 200:01:16Thanks, Ryan, and thanks to everyone for joining. I'll start today by quickly reviewing our full year 2024 performance before discussing our Q4 performance and the strong market conditions we are experiencing so far in 2025. Gerry will then take you through the details of the results and our first quarter outlook, and then I'll finish with a discussion of the recent U. S. Section two thirty two tariff announcements before turning the call over for questions. Speaker 200:01:43Century produced strong results in 2024, generating adjusted EBITDA of $245,000,000 for the year and $82,000,000 for the fourth quarter. Overall, strong realized aluminum prices, both at the LME and regional premium level and low energy prices, drove increased profitability in the fourth quarter. Aluminum prices averaged $2,575 for the quarter and rose further in Q1 to date with spot LME trading above $2,700 and Midwest Premium trading near $0.39 today. Turning to Slide four. IndiHub power prices continued to be attractive in Q4 as a mild start to winter kept natural gas and power prices low. Speaker 200:02:29Cold snaps in January and February have led to higher U. S. And European gas and energy prices so far in 2025, and we have experienced some of this normal seasonality in our power prices at Seabree in the first quarter. Turning to Page five. As you can see in the top left graph, strong global demand and continued constraints on new global supply is expected to move the global market into deficit by over 600,000 tonnes in 2025. Speaker 200:02:58Global aluminum supply remains challenged with China approaching its 45,000,000 tonne production cap and Limited announced new projects outside of China. We believe demand growth will continue to outpace supply in 2025 and for years to come. With inventories again at multiyear lows of forty nine days, Western demand growth in 2025 should be supportive of higher aluminum prices as we move forward in the year and inventories continue to deplete. Alumina supplies also remained tight in Q4, driving API alumina prices to all time highs in late November and early December. Alumina prices have retreated somewhat in 2025 with spot API trading today around $5.00 $5 Our Germanalco acquisition and LME linked commercial contracts continue to serve us well during this period of alumina price volatility. Speaker 200:03:57During Q4, '1 of our major alumina suppliers declared a force majeure, which reduced deliveries under one of our supply contracts and required us to procure some spot API alumina in Q4. Fortunately, we were able to reach a financial settlement with the supplier that fully offset the additional costs of these spot cargos. Please just note that the $12,000,000 benefit from the financial settlement was booked in Q4, while the offsetting one time costs associated with the replacement material will not roll through our results until Q1 due to FIFO accounting. Just to wrap this up, the FM was limited to Q4 and we do not expect any further impact from this beyond Q1. You can continue to use our 50% JAMALCO and fixed and 50% LME linked alumina sensitivity numbers for Q2 and beyond. Speaker 200:04:53On Page six, you can see our other raw material price inputs continue to be constructive, but we did see some uptick in coking pitch prices as we enter 2025. Caustic prices and HFO continue to be at levels that are very constructive for Chamelco. Turning to operations. Across the company, our assets continue to deliver strong operating results into year end. Starting with Seabree, twenty twenty four represented one of the smelter's finest operating years ever, delivering strong results across their operating KPIs. Speaker 200:05:25We are very proud of the fine assets that the team has created there. Mount Holly did suffer some minor operational instability in Q4 as an excursion on the carbon side of the business increased operating costs and drove slightly lower production across the plant. The management team there has this issue well in hand, and we expect the plant to return to normal performance over the course of Q1. At Grunder Tongji and Jamalco, the respective teams delivered excellent operating quarters. And Jamelco notably is off to a very strong start to 2025 with January production at the highest monthly level since we purchased the plant. Speaker 200:06:05The Jamelco team continues to focus on improvement, both through operational optimization and execution of our multiyear CapEx program that will aim to increase production at Jamalco towards 1,400,000 tonnes of capacity. In Q4, the Jamalco team took action to right size its workforce by implementing a 5% reduction in the plant's headcount. This step was necessary to lower the plant's labor expense and increase productivity and continues our progress towards Jamalco's goal of producing in the second quartile of the cost curve. Our evaluation process at Hassel made good progress with strong interest and lots of due diligence ongoing. We will keep you updated on progress here as we move through the year. Speaker 200:06:52Wrapping up with some very good news out of Iceland. Recent rainfall and stronger than expected snowmelt has improved reservoir levels in the hydropower schemes on the island. Given these improved reservoir levels, the National Power Company ended the power curtailments to Grundratongi in mid February. The curtailments had originally been expected to last through May. The plant is now in the process of restoring operations to full production, which will have a partial benefit in Q1 and should result in full production levels for Green Gutongi in Q2. Speaker 200:07:25The positive financial impact of the additional production is included in our outlook on Page 10 in our full year volume guidance that is included later in this presentation. Gerry will now walk you through the details on the quarter and our Q1 outlook. Speaker 300:07:42Thank you, Jesse. Let's turn to Slide seven to review fourth quarter results. On a consolidated basis, fourth quarter global shipments were approximately 167,000 tonnes, slightly lower than last quarter due primarily to year end cut off timing of shipments. Net sales for the quarter were $631,000,000 an increase of 92,000,000 sequentially. This was driven by higher third party aluminum sales volume along with higher aluminum prices and regional premiums. Speaker 300:08:16Adjusted net income was $46,000,000 or $0.49 per share. The main adjusting items were add backs of $5,000,000 for share based compensation and $2,000,000 for lower of cost or net realizable value on inventory, partially offset by a $6,000,000 deduction for the unrealized impact of forward derivative contracts. Looking at Q4 operating results, adjusted EBITDA attributable to Centuri was $82,000,000 Liquidity was $245,000,000 to end the fourth quarter. This consisted of $33,000,000 in cash and $212,000,000 available on our credit facilities. Our liquidity position remains near target range but decreased last quarter primarily due to working capital dynamics within Alumina Sourcing. Speaker 300:09:10Turning to Slide eight to explain fourth quarter sequential improvement and adjusted EBITDA on a normalized basis. As a reminder, the Treasury Department published final 45x rules addressing carbon and other operating supplies in Q3. As a result, we recorded an incremental tax credit to true up the full year 2023 and year to date 2024 periods in the third quarter. Normalized adjusted EBITDA for the fourth quarter improved $9,000,000 to $82,000,000 Realized LME of $2,462 per ton was up $11 versus prior quarter. While realized U. Speaker 300:09:52S. Midwest premium of $436 per ton was up $15 and European delivery premium of $341 per tonne was up $6 Together, higher metal prices and regional premiums contributed an incremental $4,000,000 compared with prior quarter. We also realized favorable energy costs adding $2,000,000 of EBITDA. In addition, as Jesse discussed, we recorded a $12,000,000 benefit after reaching a settlement with an external alumina supplier regarding a force majeure supply disruption in Q4. These benefits were partially offset by unfavorable other raw material costs of $3,000,000 and higher operating spend at Mount Holly, a headwind of $5,000,000 With that, let's turn to Slide nine for a look at cash flow. Speaker 300:10:46We began the quarter with $33,000,000 in cash. Adjusted EBITDA contributed $82,000,000 Increased borrowings of $42,000,000 was used to support the working capital build. Capital expenditures totaled $13,000,000 Interest and taxes were $14,000,000 and $9,000,000 respectively. The force majeure settlement was recorded in adjusted EBITDA for the fourth quarter. But as Jesse already noted, the offsetting cost will run through inventory in Q1. Speaker 300:11:19Finally, the regular 45x tax credit booked in the quarter increased the tax credit receivable on our balance sheet until direct cash payments from the federal government are received. Through December 31, we have a 45x receivable of $152,000,000 related to full year 2023 and 2024 operations. At the end of quarter four, we had $33,000,000 in cash. Let's turn to Slide 10 for Insight's indoor expectations for the first quarter of twenty twenty five. For Q1, the lagged LME of $2,575 per tonne is expected to be up about $113 versus Q4 realized prices. Speaker 300:12:03The Q1 lagged U. S. Midwest premium is forecast to be $600 per tonne, up $165 Remember, the realized Midwest premium is on an approximately one month lag, so the recent significant premium increase will be reflected primarily in Q2 results. The European delivery premium is expected at $345 per tonne or up about $5 per tonne versus the fourth quarter. Taken together, the lagged LME and delivery premium changes are expected to have a $35,000,000 to $40,000,000 increase to Q1 EBITDA compared with Q4 levels. Speaker 300:12:43Normal seasonality will impact power prices and should be an approximate $15,000,000 EBITDA headwind in Q1 after a mild start to winter in Q4. We expect carbon and other material prices to increase by $5,000,000 The force majeure notice from one of our alumina suppliers caused us to purchase some alumina cargos at spot prices during Q4. The additional cost of these cargos was fully offset by a $12,000,000 financial settlement that we reached with our supplier in Q4. Note the benefit of the financial settlement was realized in Q4, but due to FIFO accounting, the higher cost of the cargos will flow through our results in Q1. So while we are showing a one time $10,000,000 to $15,000,000 aluminum headwind in Q1, the impact of this was really offset by the financial settlement rerecorded in Q4. Speaker 300:13:36To be clear, we do not expect this will repeat in Q2 or beyond. We will incur approximately $5,000,000 of higher OpEx from pot reline costs to return to full pot complement at Grunder Tonge and trailing restructuring costs associated with the Jamaco workforce changes. Volume and mix will add an incremental $10,000,000 benefit. All factors considered, our outlook for Q1 adjusted EBITDA is expected to be in a range between $75,000,000 to $85,000,000 As previously discussed, this outlook does not include the full quarter impact of the significant increase in Midwest Regional Premium since the announcement of the revised Section two thirty two tariffs. Using the sensitivities provided in our appendix, you can see that this will have a significant effect on the profitability of our U. Speaker 300:14:27S. Business with each $0.01 of increase in Midwest Premium equating to an additional $9,000,000 of EBITDA on an annualized basis. When you apply that to the nearly $0.2 increase we have already experienced since Q4, you can see the material impact of this action on our American operations. Please just remember that due to our contractual pricing agreements, Midwest premium will run through our financial results on a one month lag, which means the vast majority of the benefit from the increased Section two thirty two tariffs will not hit our financial results until Q2. Now referring to Slide 11 for the full year 2025 financial assumptions. Speaker 300:15:09We expect shipments to improve to 700,000 tons in 2025 as all plants operate at targeted utilization levels. We expect to spend approximately $45,000,000 to $50,000,000 in sustaining CapEx. This is in line with historical sustaining CapEx for the smelter assets and now includes JAMALCO. We also plan to invest $25,000,000 to $30,000,000 in various projects across the asset base that meet or exceed our return threshold. The investment CapEx will focus on improving operating efficiencies at JAMALCO and our current U. Speaker 300:15:44S. And European facilities. The 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 16 in the appendix. With that, I will hand the call back to Jesse. Speaker 200:16:05Thanks, Jerry. Turning to Slide 12, I'd like to end the prepared portion of our call by thanking President Trump for so quickly taking action to strengthen the Section two thirty two tariffs on aluminum. When President Trump originally created the Section two thirty two program in 2018, it allowed The U. S. Aluminum industry to steady itself and begin to invest again in U. Speaker 200:16:27S. Production. We were proud to do our part as we invested in U. S. Production and became the largest producer of primary aluminum in The United States. Speaker 200:16:38Unfortunately, after President Trump left office, the effectiveness of the program was degraded through a number of country exemptions that allowed foreign producers to bypass the program and even increase their imports to all time high levels, including imports from exempted countries increasing by over 25% since 2018. Effective March 12, President Trump's actions will restore the original effectiveness of the Section two thirty two program by revoking all country and product exemptions and raising the tariff rate from 10% to 25%. The effects of President Trump's action is beginning to be reflected in the Midwest premium, which has already risen from the $0.2 we realized in Q4 to $0.39 spot today. We believe that the Midwest premium has room to increase further following the effective date of the program in March. As the largest producer of primary aluminum in The United States, Century is doing its part to build and secure the aluminum production that is so essential to U. Speaker 200:17:40S. National security needs. When complete, our new smelter project will represent the first new smelter built in The U. S. In fifty years and will double the size of the existing U. Speaker 200:17:51S. Industry. The New Century Smelter will build on our leading market position to fulfill the ever growing strategic need for a secure American supplier of cutting edge primary aluminum alloys and value added products. The New Century Smelter will also provide our U. S. Speaker 200:18:08Customer base with a secure domestic source of military grade primary aluminum as well as a full suite of value added products produced with best in class technology. The new smelter will create over 1,000 full time direct jobs and over 5,500 construction jobs here in The United States. We continue to make good progress on the project, having completed the second phase of engineering work and nearing completion of site selection and energy supply negotiations. We are grateful to President Trump and his administration for recognizing the vital importance of a strong domestic primary aluminum industry to U. S. Speaker 200:18:45National security. These actions will help to underpin further investment in our industry, strengthen domestic supply chains and ensure The U. S. Industry will be able to meet U. S. Speaker 200:18:55Needs for this critical mineral. With that, we are ready for your questions and we'll turn the call over now to the operator. Operator00:19:30Our first question comes from Nick Giles with the company B. Riley. Nick, your line is now open. Speaker 400:19:38Thank you very much, operator, and good afternoon, everyone. Guys, congrats on all the progress here as of late. My first question is, you noted that the more recent rise in Midwest premiums won't be reflected until 2Q. And so I was wondering if you could help bridge us to your earnings power in the current environment. I believe Midwest premium in your 1Q guide versus spot today could imply an annual impact of around $100,000,000 So, I wanted to confirm that and see how we might think about other moving parts. Speaker 400:20:11Thanks a lot. Speaker 200:20:14Yes. First, Nick, congrats on the new role. Glad to have you covering us and look forward to working with you. Second, good question. So yes, where we've seen Midwest go maybe just to start with, so far, we've seen Midwest go from the $0.2 we realized in Q4 to the $0.39 we're seeing in spot today. Speaker 200:20:38And in our Q1 outlook, we've assumed a realized Midwest premium of $0.27 So, if you take it to spot, you're right in the ballpark where that could be. And ultimately, we think that Midwest premium will go higher. We don't think it's fully reflecting, the value of the tariff, today. And we could see another $0.05 to $0.1 upside to what you see today. So if you take that altogether, you could see about $0.2 upside from where we are today, call it $0.2 to $0.25 from what we've assumed in the Q1 guide. Operator00:21:22Excuse Speaker 200:21:25me, sorry, $0.2 to $0.25 from what we realized in Q4, looking somewhere in the $0.45 to $0.5 range on a measured basis. Speaker 400:21:38Got it. Got it. Jesse, I really appreciate that. And maybe as a follow-up, I was hoping to get an update on how you're viewing a potential Mount Holly restart given current Midwest premiums and the implication of $2.32 tariffs. And then I had the same question for Hawesville. Speaker 400:21:58Has this impacted your ongoing strategic process? Thanks a lot. Speaker 200:22:04Yes, sure. Great question, Nick. So, obviously, since the announcement, which was just last week, we have been updating our analysis at Mount Holly. Obviously, the tariff program is extremely constructive for the smelter. As we mentioned, we did experience a little instability in the operations in Q4. Speaker 200:22:22That will get cleaned up over Q1. And we also see continued high spot outlet prices. Those should also come down. So we'll continue to update you, but we're definitely moving in the right direction for a restart at Nahalley. The Hudsville price list continues, valuation ongoing. Speaker 200:22:43We've seen strong continued interest, in the site. But obviously, we'll continue to look at the new environment as we make a decision of what to do there. But as we've said before, I think first to come will be at Nalholland restart and then we'll go from there. Speaker 400:23:04Got it. That's good to hear. Maybe one more if I could. Maybe a more point of clarification. The 1Q guide is almost taking a double hit from the non recurring settlement plus the Illumina spot purchase given the lags as you outlined? Speaker 400:23:19And is it fair to assume that this kind of negative $10,000,000 to $15,000,000 hit will reverse in 2Q? Or am I thinking about that wrong? Speaker 200:23:31No, you're absolutely right, Nick. And there's just a little bit of accounting noise running through that. There's a couple of ways of looking at it. One, if instead of booking the financial settlement in Q4, you book that in Q1, you actually wouldn't see a headwind in the outlet price in Q1. Those do fully offset, as Gerry said. Speaker 200:23:50And secondly, you're completely correct. You won't see that repeat in Q2. So that should all come back in Q2. Speaker 400:24:02Guys, I really appreciate all the color. So, again, congrats on the progress and continued best of luck. Speaker 200:24:10Thanks, Nick. Operator00:24:12Next question comes from Katrinik with the company BMO. Katrinik, your line is now open. Speaker 500:24:19Hi. Thank you for taking my questions. Maybe going back to Mount Holly, if you do decide to restart it, how long it would take you and what would the investment needed be? Speaker 200:24:33Yes. So we're updating all that analysis, Katya, as I said, since the news came last week. As we've said before, you're probably looking at somewhere around a nine month timeline from decision to restart, somewhere in that range. And we'll give you an update on the cost of a restart once we make that decision and announce the Speaker 600:24:57restart. Maybe Speaker 500:24:59if I remember correctly, when you were restarting the potline at the hospital a few years ago, did it cost about $45,000,000 to $50,000,000 per potline? Am I remembering that correctly? Speaker 200:25:14Yes, that's not exactly what it was. But again, there's obviously been a lot of changes, since 2018 when those restarts were done for about seven years down the line. So, we'll just go ahead and give you that full analysis once we've made the decision, at Mount Holly. Speaker 500:25:33And maybe, you know, you mentioned the new smelter, you're making progress there. And I know that this is a multiyear type of project, but can you talk a bit more about how much it would actually cost to build a new smelter in U. S? Speaker 200:25:51Yes. We have made really good progress on the new smelter. We've in January, we finished up the process to finalize the terms of the award and went formally under award with the Department of Energy for the $500,000,000 grant that we've talked about before. We've also finished up the second phase of engineering work for the project. And really, the next step for the project will be to finalize the energy contract negotiations and site selection, which is ongoing today. Speaker 200:26:26And we'd expect that gets done, you know, by the end of Q2 or so. So, we'll give you a further update on that project after we've made that finished that work and made a decision to move forward into the next step. Speaker 600:26:44Okay. Thank you. Operator00:26:51The next question comes from Timah Sanders with the company Wolfe Research. Timah, your line is now open. Speaker 600:26:58Hi, good evening. I wanted to kind of hit back on some Speaker 500:27:01of the topics that have been Speaker 600:27:02closed on. Hey there. So I guess to circle back on Hassell, just the one sentence in your prepared remarks that made me wonder, is there less conviction on that process? Do you have anything in terms of timing or progress that you can update us on? And just to circle back, it is possible that it restart? Speaker 600:27:25Or are you pursuing this alternative, 100%? Thank you. Speaker 200:27:32Not at all. No nothing to read into that update other than the process continues to be going well. Very strong continued interest in the site and lots of people doing due diligence. As I said on the last call, it is a complicated process, and it's a little bit different than some of the other transactions that you've seen done in the space. We're here. Speaker 200:27:55We're going from an industrial site to a potential different use case. And as you might imagine, given the capital scale of what a potential purchaser would be looking at, they want to do their due diligence first. And so that's really ongoing. Process is still going well. And we'd expect to continue to keep you updated. Speaker 200:28:12To the second part of your question, Tim, what we said all along is we will always measure whatever comes out of this process versus the potential value of the site under our restart scenario. And obviously, the recent actions will help the second part of that that analysis. So we'll just go ahead and and pursue the process. And once we've finished it, we'll give everyone an update. But, nothing to read into. Speaker 200:28:39Process continues to go well. And we're excited about it. Speaker 600:28:44Okay. That's great. Appreciate the additional color. Also really enjoy the industry environment forecast that you have here for Midwest premium, staying high alumina prices, those are helpful. In the assumption here with that, that does include a 25% Section two thirty two effectiveness on March 12. Speaker 600:29:06But is there any assumption of an additional tariff on Canada? Is that in your thought process of what could play out going forward with that debate? I guess that dialogue is ongoing. Speaker 200:29:21Yes. We continue to watch that dialogue as well. And just to be clear, that's not included either in our guidance or sort of my views on where Midwest premium can go that I gave when we were speaking to Nick earlier. So, again, we think fundamentally if the 25% tariff goes on, you'll see a Midwest premium somewhere in the $0.45 to $0.5 range. And that does not include any other additional tariffs that may come. Speaker 600:29:51Okay, helpful. And then last one from me. Jamalco, you've been talking about expanding in this alumina environment. That sounds great. And I think that would be part of the support for Matt Hawley. Speaker 600:30:02So just want to make sure I'm thinking about that properly. Have you talked about the capital cost and timing for that expansion? Speaker 200:30:13Yes, we have. And just to remind but just to remind you, so the investment CapEx at Jamalco, we estimate will be somewhere in the $50,000,000 to $20,000,000 range in 2025. You'll probably see a similar range in 2026 as we continue to invest in projects that are needed to bring that production capacity back up. And that's included in the investment CapEx that's in the back of our deck. Speaker 600:30:47But is that part of the process of thinking about the Mount Holly restart is to secure that additional alumina capacity or are they not necessarily linked? Speaker 200:30:57They're not necessarily linked. We can secure that in the marketplace, Timna. But of course, as we look to keep our book balanced, we're excited to have that additional production within our portfolio. Speaker 600:31:11Okay. Many thanks. Operator00:31:18Our next question comes from John Tumazos with the company, Very Independent Research. John, your line is now open. Speaker 700:31:29Thank you. Today, the International Aluminum Institute reported record daily global output, up 2.5%. And with inventories falling, it implies about a 3.5% demand growth rate in the early part of this year. And last year's apparent demand growth rate was about the same 3.5%. Do you think demand is growing that rapidly? Speaker 700:32:04And or do you think that there is some inventory building maybe because of alumina worries, less Russia exports, less China exports, maybe lower interest rates encourage some restocking or some tariff uncertainties? Speaker 200:32:25No, John. We really haven't seen any evidence of any sort of shadow stockpiling, if you will, if that's sort of what the question is. We think that forty nine day number has been very stable, and you continue to see that tick down over the past several quarters. And we do think that I can't speak to IAI's exact numbers, but I think the ballpark that you gave and the analysis there is largely correct. As I said in my prepared remarks, we think aluminum demand will outpace aluminum supply growth over the next several years for sure. Speaker 700:33:05I could follow-up. The IAI reported a record Chinese output for January, '1 hundred and '20 thousand '6 hundred and '40 '5 tons a day. And it used to be that they would cut output in the winter to reduce urban pollution, but they've migrated and changed their energy sources a little bit. How do you interpret the Chinese output at a record in the middle of the winter? And with 6,000,000 tons of alumina capacity being idled, should we adjust that 45,000,000 tonne cap to 48,000,000 or 50,000,000? Speaker 200:33:54No, absolutely not, John. I think both our view and I think widely the marketplace view is that the Chinese are respecting the 45,000,000 tonne cap, and we would expect that will be where it goes going forward. And I think one thing that hasn't been talked about a lot, but the decision, back in the fall to eliminate the VAT rebate on export, will is actually a sign of their intention to recognize that 45,000,000 ton cap. So, in other words, as they look to meet their own downstream demand, they're going to keep all those semi products within China that used to leave. So, we view those as actually very supportive of the 45,000,000 tonne cap and really bolsters and supports that that's the intention of the Chinese government. Speaker 200:34:46Of course, we'll see, but that's our view for now. Speaker 700:34:50Thank you. Operator00:34:57At this time, there are no more questions registered in queue. There are no more questions registered in the queue. I'd like to pass the conference back over to our hosting team for closing remarks. Speaker 200:35:17Okay. Thanks everyone for joining the call. We're really excited about what's to come in 2025 for Century. We think the market sets up very well for our company and we're glad to continue our role that we play both in The United States and Europe in producing aluminum that's needed. Thank you very much. Speaker 400:35:36Talk to Speaker 200:35:36you next quarter. Operator00:35:39That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.Read morePowered by