Century Aluminum Company Applauds Biden Administration Decision To Triple Chinese Aluminum Tariffs
On May 14, 2024, President Biden announced a significant increase in tariffs on Chinese aluminum imports under Section 301 of the Trade Act of 1974. This move aims to counter China's unfair trade practices and overcapacity issues. Jesse Gary, CEO of Century Aluminum (NASDAQ: CENX), commended the decision, highlighting its importance for the U.S. aluminum industry. Century plans to build a new facility that will double U.S. aluminum capacity and utilize cutting-edge renewable technologies. The administration has also announced a $500 million grant to support this initiative.
- Tripling tariffs on Chinese aluminum imports could reduce competition for U.S. aluminum producers.
- Century Aluminum plans to build a new facility, doubling domestic capacity, which may enhance revenue.
- $500 million grant announced by the administration will support Century's new greenfield facility.
- The new facility aims to be one of the 'greenest' smelters, which could attract ESG-focused investors.
- Increased tariffs could lead to higher aluminum prices, potentially affecting downstream industries and demand.
- Building a new facility entails significant capital expenditure and long-term financial commitment.
- Dependence on government grants may pose a risk if future policies change or funding is delayed.
Insights
Tripling tariffs on Chinese aluminum imports is a significant development for Century Aluminum Company (NASDAQ: CENX) and its broader market. Financially, this move is poised to improve domestic pricing power and market share for U.S. aluminum producers. By reducing the volume of cheaper Chinese aluminum, domestic companies can operate with reduced price competition, potentially leading to higher profit margins. For investors, this indicates an upward revision of revenue and profitability forecasts in the short-term. Additionally, the anticipated construction of a new smelter, facilitated by a
The Section 301 tariffs are part of a broader economic strategy to address unfair trade practices. This policy aims to not only level the playing field but also incentivize domestic production. For the U.S. aluminum industry, this can translate to enhanced domestic investment and job creation. However, while this policy benefits local producers, it could also result in higher costs for consumers and downstream industries that rely on aluminum. This move might lead to increased prices on consumer goods and potential retaliatory measures from China, which could affect other U.S. sectors. Despite these potential drawbacks, the overarching goal remains fostering a resilient and self-sufficient domestic industry, reducing dependency on volatile global supply chains.
The announcement to build one of the “greenest” smelters in the world positions Century Aluminum as a leader in sustainable industrial practices. The integration of renewable energy and cutting-edge technology aligns with global trends towards reducing carbon footprints and promoting environmental stewardship. For investors, this enhances the company’s ESG (Environmental, Social and Governance) profile, making it more attractive to socially conscious investors and funds. Additionally, regulatory support in the form of a significant grant underscores governmental commitment to sustainability, potentially paving the way for further favorable policies and subsidies. This not only strengthens Century Aluminum’s market positioning but also aligns it with future regulatory and market shifts towards sustainability.
CHICAGO, May 14, 2024 (GLOBE NEWSWIRE) -- President Biden today announced that his administration would triple existing tariffs on Chinese aluminum imports pursuant to Section 301 of the Trade Act of 1974. Today’s action provides a clear and strong response to China’s unfair trade policies and will help to put a stop to China’s continuing build-up of overcapacity and non-market pricing actions.
Jesse Gary, Century's (NASDAQ: CENX) President and Chief Executive Officer, who attended the White House event announcing the move, praised the President's action: "Today’s actions are critical for the U.S. aluminum industry. President Biden's decisive leadership on Sec. 301 tariffs and to invest in the resurgence of U.S. manufacturing, shows this Administration’s commitment to U.S. primary aluminum production."
"Thanks to the President's leadership, Century is planning to build a new greenfield facility that will double existing domestic capacity. The smelter would not only be the first new American aluminum smelter in 45 years, but also one of the “greenest” smelters in the world, powered with cutting edge technology and renewable energy. This Administration announced a
Speaking at the White House event, Mr. Gary said, "From electric vehicles to missiles, aluminum is a key component in most aspects of our modern economy and critical for our defense.” He continued, “For my company, our workers, and others across this country, unfair trade is something that is very real. Today’s announcement creates the climate for business to succeed, investments to be made, jobs to be created, and workers to earn a good wage.”
About Century Aluminum Company
Century Aluminum is an integrated producer of bauxite, alumina, and primary aluminum products. Century is the largest producer of primary aluminum in the United States and also operates production facilities in Iceland, the Netherlands and Jamaica.
Visit www.centuryaluminum.com for more information.
Cautionary Statement
This press release and statements made by Century Aluminum Company management contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to the "safe harbor" created by section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are statements about future events and are based on our current expectations. These forward-looking statements may be identified by the words "believe," "expect," "hope," "target," "anticipate," "intend," "plan," "seek," "estimate," "potential," "project," "scheduled," "forecast" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," "might," or "may" and include statements concerning our plans related to the construction of a new primary aluminum smelter, the capacity of the smelter, the receipt of the related IDP funding, the number of jobs to be created and the location of the new facility.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings made with the Securities and Exchange Commission. Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors that could cause actual results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, the reader is cautioned not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact
Ryan Crawford
312-696-3132
Source: Century Aluminum Company
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