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Century Aluminum (CENX) Begins Construction of a New Casthouse

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Century Aluminum Company (CENX - Free Report) recently announced that its fully-owned subsidiary, Nordural Grundartangi ehf, has started the construction of a new low-carbon billet casthouse at its Grundartangi, Iceland smelter.

The casthouse will have a capacity of 150,000 tons of billet production and is projected to begin production in first-quarter 2024. The expansion project will also enhance Grundartangi’s annual capacity to manufacture primary foundry alloys from its current 60,000 tons of capacity to 120,000 tons.

This additional billet and primary foundry alloy capacity replaces standard-grade ingot production, raising expected product premiums for Grundartangi products. The $120-million investment is anticipated to create roughly 90 jobs.

Century Aluminum stated that the casthouse would enable Grundartangi to produce over 80% of its production as value-added products, further boosting this world-class asset. By utilizing renewable electricity to further process its aluminum into billets in Iceland, it will not only create a more valuable product, but also strengthen the Natur-Al brand and lower the carbon footprint of aluminum production throughout Europe. The project will be financed with Icelandic green financing from Arion Bank and powered with green energy from its partners at Landsvirkjun, the company noted.

Shares of Century Aluminum have surged 73.9% in the past year compared with a 25.2% rise of the industry.

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The company, on its third-quarter call, stated that it is on track with the progress of the expansion projects at Mt. Holly and Hawesville. It expects the projects to be completed by the year-end, which will provide the much-needed additional units to the marketplace as well as additional LME and regional premium pricing exposure.

The company also noted that global energy shortages and China’s de-carbonization policies have led to production cuts in China and Europe, pushing the global aluminum market into a deficit and taking down aluminum inventories to multi-year lows.

 

Zacks Rank & Key Picks

Century Aluminum currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , The Chemours Company (CC - Free Report) and Dow Inc. (DOW - Free Report) .

Nucor has an expected earnings growth rate of 583.5% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 18.1% upward in the past 60 days.

Nucor beat the Zacks Consensus Estimate for earnings in two of the last four quarters while missing the same. The company has a trailing four-quarter earnings surprise of roughly 2.74%, on average. Its shares have also rallied around 122.4% over a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for the current year has been revised 10% upward in the past 60 days.

Chemours beat the Zacks Consensus Estimate for earnings in all of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 34.2%, on average. Its shares have also rallied around 44.4% over a year. It currently sports a Zacks Rank #1.

Dow has a projected earnings growth rate of 447% for the current year. The consensus estimate for the current year has been revised 8.7% upward in the past 60 days.

Dow beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 14.1%. The company’s shares have gained around 15% in a year. It currently flaunts a Zacks Rank #1.


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