Century Aluminum costs cut by virus outbreak

Production costs at Glencore-owned smelter Century Aluminum have dropped as a result of the coronavirus outbreak in China, chief executive Michael Bless said.

"Input costs have moved uniformly in Century's favor" as the virus outbreak leads to a disruption in global economic activity, Bless said yesterday. Alumina prices have normalized after dropping, and carbon prices have continued to decline, he said.

Bless also cited declining electricity prices in Europe and the US as another boon to Century's bottom line.

Still, the company's loss in 2019 widened to $80.8mn, from a $66.2mn loss in 2018.

Century boosted its shipments by 2pc in 2019 as it restored offline capacity at two Kentucky plants, but revenue sagged by 1pc on lower London Metal Exchange prices.

Century shipped 811,244 metric tonnes (t) in 2019, up from 749,850t a year earlier. But the Midwest transaction price for P1020 aluminum suffered over the course of the year, causing sales to fall to $1.84bn from $1.89bn over the same period.

The Argus Midwest transaction price for P1020 aluminum averaged 99¢/lb last year, a 13pc drop compared with 2018, leading to lower prices for primary aluminum product and for downstream products priced off of the transaction price.

A removal of the 10pc Section 232 US tariff on aluminum from Canada in May weighed on the Midwest premium, which caused it to fall by approximately 4¢/lb over the course of 2019.

By John Betz