Network Metals LLC

Century Aluminum (NASDAQ:CENX), a company we know well, is now considering further production cuts at its Hawesville smelter. One potline has already been taken down, reducing overall production by 52,000 tons per year, and another potline representing 50,000 tons more annual capacity could be taken offline as early as next month. We’d like to reiterate here that Century took out all of its hedges at the top of the market last year, and these production cuts will continue until we see some significant improvement in the aluminum price. For now, the price of aluminum is below Century’s production cost, and the company is going to have to work hard with its customers, creditors and suppliers to find an economic solution. At this point cutting production in the face of terrible demand for aluminum metal is the most logical solution for the company, and we suspect that further cuts will indeed be its best option.