Favorable Power Agreement May Result in Aluminium Capacity Restart: Century CEO Bless
04 August 2017 by Staff
Century Aluminum’s president and CEO told investors on Wednesday that his firm would instantly begin the process of reopening the 100 thousand metric tons per year of idled aluminium smelting capacity it has in the United States if the price it paid for power at its Mt. Holly smelter were lowered.
Michael Bless made the remarks in the course of Century’s quarterly earnings call. His comment was in response to a question regarding when the firm might restart the idled potline at Mt. Holly and the idled capacity at its plant in Hawesville. As to Mt. Holly, Bless said a restart would happen “as soon as we can get the last 25% of that power from the market.”
The Mt. Holly facility has a nameplate capacity of 225 thousand metric tons per year but has been running only one potline for approximately two years, citing the prohibitively high cost of power it pays to Santee Cooper. Century is operating under a 2015 agreement that allows it to buy three-quarters of its power on the open market, but locks it in to buying the remainder from Santee Cooper at above-market prices.
“If we could achieve through our litigation or otherwise the last 25% to get to market, we’d restart that today,” Bless explained. However, even if and when a new agreement is reached, pouring new aluminium at the plant will still take “several months.”
Low aluminium prices have been the culprit keeping Hawesville running only two of its five potlines, said Bless. A restart at Hawesville is also sought after by Century, as that facility “makes money” thanks to better aluminium market performance and the ability to buy the entirety of its electricity on the open market.
Bless said the idled potlines may come to life “if we had some confidence that the current price environment, at the very least, was going to persist,” he explained. “We’re just not quite there yet.”
Bless also had good words to say about the Trump administration’s movement on the issue of China’s dumping of aluminium in the United States. However, he was still unsure what the investigation might yield.
“It’s difficult to predict where this process heads and the timing,” he opined. “But the order itself is an admission that the administration understands the problem.”
“We’re convinced they’re focused,” Bless went on. “This one hasn’t been shunted to the side. They’re working actively on it,” although it is difficult to predict “in what form it comes and when it comes.”