Century Aluminum Soars 13.36% on Tariffs, Trade Shifts

Century Aluminum's stock surged by 13.36% in pre-market trading on June 2, 2025, reflecting a significant bullish sentiment among investors.

The global aluminum market is undergoing a major transformation, driven by supply chain disruptions, escalating geopolitical tensions, and governments' focus on domestic industrial resilience. Century Aluminum, a key U.S. producer, is benefiting from these shifts. The company's Q1 2025 results show a mix of high debt levels and operational challenges, but also strategic advantages from government support, a strong aluminum market, and decarbonization trends.

Century Aluminum is capitalizing on U.S. trade policies, particularly the Biden administration's decision to raise Section 232 tariffs on imported aluminum to 25%. This move has directly boosted the company's earnings by $16.2 million in Q1. Additionally, the company is leveraging federal funding to expand its operations, with a proposed new smelter in the U.S. set to receive $500 million from the Department of Energy.

The geopolitical landscape is also favorable for Century Aluminum. Sanctions on Russian aluminum exports have led to a global deficit, driving up aluminum prices. The London Metal Exchange price of aluminum has risen by 12% year-to-date, while Midwest premiums hit a decade high in Q1. This deficit is expected to continue, creating opportunities for U.S. firms like Century Aluminum.

Despite these advantages, Century Aluminum faces risks, including high debt levels and rising energy costs. The company's net debt stands at $442 million, and energy costs shaved $3.5 million off net income in Q1. The funding for the new smelter is another challenge, as Century Aluminum must secure an additional $200–300 million through equity or loans.

However, the long-term prospects for Century Aluminum are promising. The company's alignment with U.S. industrial policy and its role in decarbonization make it a strong player in the aluminum market. The Inflation Reduction Act's tax credits for clean energy projects further incentivize demand for domestic aluminum, and Century Aluminum's existing assets are well-positioned to capitalize on this shift.