US-based primary aluminum producer Century Aluminum expects the Midwest premium to strengthen above 40¢/lb in the coming months, drawing support from the depletion of imported aluminum — brought in ahead of widespread tariffs — from the market.
The Illinois-based company foresees the regional premium ranging between 45-50¢/lb, helping to boost overall aluminum prices that Century expects to climb further this year, it said during its latest quarterly earnings call.
The company registered a $16mn tailwind from a higher Midwest premium in January-March, which should climb in the second quarter given that it will be the first full three-month period that 25pc import tariffs are in place, Century said.
The company noted that the average regional premium increased by $165/metric tonne (t) to $602/t in the latest quarter, and it estimates that will rise to $866/t in April-June. The spot premium currently sits around $850/t, Century added.
Century chief executive Jesse Gary noted that "significant front-running of foreign imports" ahead of the US implementing Section 232 tariffs on 12 March raised inventory levels and have limited gains in the regional premium, which Argus assessed at 38.75¢/lb today.
Total shipments of unwrought aluminum to the US in March increased by 35pc to 441,863t — their highest level since May 2023 — from the prior month, as importers rushed to have customs-cleared units on the ground in anticipation of the higher duties.
Still, Century anticipates that prices for its products will continue to increase, reflecting greater customer appetite for domestically produced aluminum and the company's projections that the global market will enter a 400,000t supply deficit this year as China reaches its production cap.
Century's quarterly primary aluminum shipments fell by 3.4pc to 168,672t from the prior-year period, but were up sequentially on higher deliveries from its US operations.
Based on estimated production capacities at the company's operating smelters — located in Sebree, Kentucky; Mt. Holly, South Carolina; and Grudartangi, Iceland — the latest quarterly shipment totals suggest a combined utilization rate of 88pc between the three sites.
The company maintained its full-year delivery guidance of 700,000t of aluminum products.
Century will move up planned maintenance on Sebree's carbon plant, originally planned for 2026, to this year because of how well the facility is running, it said. The company will "service and refurbish" the anode press and ancillary equipment to improve the plant's performance ahead of the summer.
The company's quarterly profit fell to nearly $26mn from $245mn on the year, while revenues were up by 24pc to $634mn in the same period.
