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Century Applauds Biden Administration for Actions to Address Unfair Trade from Mexico

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Century Aluminum commends the Biden Administration for tightening rules on aluminum imports from Mexico. The new 'smelted and cast' provision aims to curb aluminum transshipments and unfair trade from third-party countries like Russia, China, Iran, and Belarus. Aluminum products originating from these countries and converted in Mexico will now face a 10% Section 232 duty. CEO Jesse Gary praised the decision for its potential to protect the domestic aluminum industry and American workers. Despite this measure, Century Aluminum noted that Mexico still receives primary metal imports from other non-tariffed third-party countries.

Positive
  • New 'smelted and cast' provision will enforce a 10% Section 232 duty on aluminum products from specified countries, potentially reducing unfair trade.
  • Decision praised for protecting the domestic aluminum industry and American workers.
Negative
  • Despite new measures, Mexico continues to receive primary metal imports from other non-tariffed third-party countries.

The recent announcement of the U.S. government's decision to impose a 10% Section 232 duty on aluminum products smelted and cast in countries like Russia, China, Iran and Belarus before being imported via Mexico is noteworthy for Century Aluminum. This policy change is likely to benefit domestic producers like Century Aluminum by reducing the influx of cheap, unfairly traded aluminum that has been impacting market prices adversely. For investors, this means potentially improved financial performance for companies like Century Aluminum, as they may face less price competition from imports.

In the short term, this can lead to an increase in Century Aluminum's stock price as the market reacts to the potentially enhanced profit margins. In the long term, sustained protection from unfair trade practices can foster a more stable pricing environment, which might help in strategic planning and capital investments. However, investors should also remain aware of retaliatory measures or trade disputes that might arise, which could affect global trade dynamics and raw material supply chains.

From a market research perspective, this policy change strengthens the competitive positioning of the U.S. aluminum industry against foreign producers who have been leveraging Mexico as a transshipment hub for lower-cost goods. Consumers and industries relying on aluminum, like automotive and construction, might see a slight rise in costs, but this can drive demand for more U.S.-made aluminum, benefiting companies like Century Aluminum.

The emphasis on aluminum being a critical material for the green energy transition and national defense highlights its strategic importance beyond basic industrial use. Investors should consider the broader economic implications, including increased domestic production, job preservation and potential innovation in aluminum applications driven by a more favorable competitive landscape.

The introduction of the 'smelted and cast' provision is a significant legal development in trade policy. By specifically targeting the origin of aluminum smelting and casting, this measure closes a loophole that allowed foreign aluminum to enter the U.S. market at lower tariffs through Mexico. For stakeholders, this sets a precedent in trade regulation that could be applied to other materials and sectors, promoting fairer competition and compliance with international trade laws.

While beneficial to domestic producers, this decision could lead to legal challenges from affected countries and their exporters. Investors should monitor any emerging legal disputes or changes in international trade relations that may impact the enforcement and longevity of this provision.

CHICAGO, July 10, 2024 (GLOBE NEWSWIRE) -- Century Aluminum applauds the Administration’s decision to toughen the rules on aluminum imports from Mexico. The introduction of the “smelted and cast” provision is an important first step in curbing aluminum transshipments and unfair trade from 3rd party countries entering through Mexico.  Going forward, aluminum that was smelted and cast in Russia, China, Iran and Belarus and converted into products in Mexico will be subject to the 10% Section 232 duty.

“We are thankful for President Biden’s continued support for the domestic aluminum industry. Aluminum is a key enabler of the green energy transition and a critical material for emerging green industries and our national defense. Today’s decision helps protect the industry and American workers,” said CEO Jesse Gary.

The United States continues to experience a surge of imports from Mexico at below market value. Earlier this year the Department of Commerce and US International Trade Commission imposed antidumping and countervailing duties on aluminum extrusions from Mexico, which are critically important. However, Mexico continues to receive primary metal imports from non-tariffed 3rd party countries beyond the four in the scope of today’s proclamation.

“Today was a positive first step and we will continue to fight for a level playing field,” Gary said.

About Century Aluminum Company

Century Aluminum is an integrated producer of bauxite, alumina, and primary aluminum products. Century is the largest domestic 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."

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


FAQ

What is the new 'smelted and cast' provision related to Century Aluminum (CENX)?

The 'smelted and cast' provision targets aluminum products from Russia, China, Iran, and Belarus processed in Mexico, subjecting them to a 10% Section 232 duty.

How does the new trade rule affect Century Aluminum (CENX)?

The new rule aims to reduce unfair trade practices impacting Century Aluminum by imposing a duty on certain imported aluminum products.

Why does Century Aluminum (CENX) support the Biden Administration's new trade measure?

Century Aluminum supports the measure as it helps protect the domestic aluminum industry and American workers from unfair trade practices.

What challenges does Century Aluminum (CENX) still face despite the new trade rules?

Century Aluminum notes that Mexico continues to receive primary metal imports from other non-tariffed third-party countries, posing ongoing challenges.

Century Aluminum Company

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Alumina Refining and Primary Aluminum Production
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United States of America
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