Century Aluminum Company (CENX) | The Buildout — AI Infrastructure
The Verdict
Century is an upstream primary-aluminum producer. Its smelters turn alumina and purchased power into standard-grade and value-added aluminum used in racks, enclosures, busway, switchgear, thermal management, and building infrastructure for data centers and power projects. Management names the power and data infrastructure build-out as one of four aluminum demand pillars, alongside commercial aerospace, defense/rearmament, and reshoring of downstream fabrication. The company's direct AI footprint is limited to a retained minority stake in a data center at the former Hawesville smelter site.
| Market Cap | — |
| Revenue (TTM) | $2.5B |
| Revenue Growth | +7.5% |
| EBITDA Margin (TTM) | 11.8% |
| Net Debt | $302M |
| Earnings Beats | 2 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Q2 2026 adjusted EBITDA was $326.9M, up from $231.4M in Q1 2026.
- All assets reached full capacity for the first time in over a decade; Mt. Holly expansion completed late June and Grundartangi restart late July.
- The July 20, 2026 executive order clears a path for Century to import up to 300,000 tonnes per year at 25% instead of 50% beginning 2027.
- Oklahoma JV with EGA would add 750,000 tonnes per year and more than double U.S. primary aluminum production, with a $500M DOE grant.
- Balance sheet turned: cash exceeded total debt as of end of July 2026, with net debt of $98M at Q2 end.
What We’re Watching
- Oklahoma FID and groundbreaking expected by end of 2026; power contract, total capex, and financing terms remain undisclosed.
- Commerce rules for the July 20 executive order remain pending; final import allowance and value are not confirmed.
- Middle East normalization risk: management's global deficit estimate fell from 1.4M tons in Q1 to around 1M tons in Q2.
- Mt. Holly post-restart instability acknowledged; management expects resolution within Q3 2026.
The operating thesis is strengthening: Century delivered both restarts, landed Q2 adjusted EBITDA within its guided range, and reported cash exceeding total debt by the end of July. The open question is whether the growth leg—Oklahoma FID, the executive-order import allowance, and the Hawesville put—turns into committed, funded capacity or remains at the expectation stage.
Earnings
In Q2 2026, Century reported net sales of $752.1M, up from $649.2M in Q1. Adjusted EBITDA rose to $326.9M from $231.4M, driven mostly by higher realized LME and regional premiums. Adjusted net income was $257.3M; GAAP net income fell sequentially to $249.3M because Q1 2026 included a $287.9M gain on the Hawesville sale.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $649M | $634M | $634M | +2.4% |
| Gross margin | 18.3% | 14.2% | 9.6% | +870bps |
| EBITDA | $109M | $71M | $67M | +62.9% |
| EPS | $3.23 | $0.02 | $0.30 | +977.7% |
| Aluminum shipments (tonnes) | 130,632 | 122,865 | n/a | — |
10 months ago, we had just lost a potline in Iceland following an unprecedented transformer failure. Mount Holly was running at only 75% capacity. Today, both plants are producing at full capacity into a market that needs every unit we can produce.— Jesse Gary, President and CEO, 2026-08-06
Management tone: Management shifted from a Q1 posture that was confident and unusually willing to bridge future earnings power to a Q2 posture the intel file describes as vindicated on delivery but more measured on pricing. On the Q2 call, management was direct about Mt. Holly post-restart instability and Grundartangi amperage, deferred capital-return detail for a second consecutive call, and elevated the July 20 executive order as a project-funding tool.
Management Guidance
Management guided Q3 2026 adjusted EBITDA to $325M–$345M. The sequential bridge includes pricing of +$5M–$10M, volume and mix of +$15M–$25M, energy of -$10M–$15M, other raw materials of -$5M, and flat OpEx. Below EBITDA, management told the market to model $20M–$25M of hedge settlement headwinds and $10M–$15M of tax expense.
Trajectory
Revenue stepped from $649.2M in Q1 2026 to $752.1M in Q2 2026. Q1 gross margin on the audited statement was 18.3%, up from 14.3% in Q4 2025 and 9.0% in Q1 2025. The next quarter is intended to be volume-led, with management's Q3 bridge adding more from volume and mix than from price and treating energy as a seasonal headwind.
The Model
The model's locked projections call for FY+1 revenue of $3,437M and EBITDA of $1,375M at a 40.0% margin, rising to FY+2 revenue of $3,980M and EBITDA of $1,632M at a 41.0% margin. Both figures represent a step-up from the Q2 2026 reported revenue of $752.1M and adjusted EBITDA of $326.9M.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.5B | $3.4B | $4.0B |
| YoY Growth | — | +36.0% | +15.8% |
| EBITDA | $258M | $1.4B | $1.6B |
| EBITDA Margin | 10.2% | 40.0% | 41.0% |
Projections are the median of 5 independent model runs. The model’s revenue sits 3.1% above analyst consensus.
Management guided Q3 2026 adjusted EBITDA to $325M–$345M. The sequential bridge includes pricing of +$5M–$10M, volume and mix of +$15M–$25M, energy of -$10M–$15M, other raw materials of -$5M, and flat OpEx. Below EBITDA, management told the market to model $20M–$25M of hedge settlement headwinds and $10M–$15M of tax expense.
What Could Go Right — and Wrong
- Commerce finalizes the July 20 executive order rules in line with management's expectation, confirming a 300,000-tonne-per-year import allowance at 25% starting 2027.
- Oklahoma FID is reached by end of 2026 with power, financing, and construction schedule intact.
- Hawesville reaches energization in 2H 2027, and the $300M put option becomes exercisable one year later.
- Gulf restarts remain slow and the global deficit persists into 2027 as management expects.
- Mt. Holly instability resolves within Q3 and Q4 volumes step up as Grundartangi amperage normalizes.
- Bahrain and Qatar restart faster than management expects, shrinking the global deficit and pressuring regional premiums.
- Commerce issues a narrower-than-expected Oklahoma import allowance or policy enforcement weakens.
- Oklahoma FID slips past end-2026, delaying first hot metal beyond 2029.
- Mt. Holly instability extends past Q3 or the Grundartangi transformer replacement disrupts production.
- AI/data-center end-market demand disappoints.
Looking Ahead
The next 12 months run from the first full-capacity quarter through the Q4 Grundartangi transformer installation, the pending Commerce rules for the July 20 executive order, and the targeted Oklahoma FID by end of 2026. If FID is reached, the story shifts in 2027 toward the 750,000-tonne smelter build-out, the start of the 25% import benefit, and eventually the Hawesville energization clock in 2H 2027.
- Q3 2026Q3 2026 results — First full quarter of expanded Mt. Holly volume; tests Mt. Holly stability.
- Q4 2026Grundartangi transformer replacement — Return to full amperage; no production interruption expected.
- End of 2026Oklahoma FID and groundbreaking — Tests power contract, total capex, financing, and project timing.
- End of 2026Mt. Holly capital payback — Management expects the expansion to fully repay its capital cost.
- Beginning 202725% import allowance expected — Century expects up to 300,000 tonnes per year at the reduced tariff.
- 2H 2027Hawesville data center energization — Starts the clock toward the $300M put right.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.2B | $2.5B | $2.5B | +13.9% |
| Gross Margin | 8.2% | 10.4% | 12.7% | +227bps |
| EBITDA | $203M | $258M | $815M | +26.8% |
| EBITDA Margin | 9.2% | 10.2% | 11.8% | +104bps |
| Net Income | $337M | $42M | $350M | -87.6% |
| Free Cash Flow | −$107M | $85M | −$379M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)12.7%
- EBITDA Margin (TTM)11.8%
- Net Margin (TTM)13.7%
- ROIC11.2%
- FCF Conversion9.1%
- SBC / Revenue0.4%
The Company
Century produces primary aluminum across standard-grade and value-added forms: standard-grade ingot, primary foundry alloy, billet, sow, and foundry products, plus the Natur-Al low-carbon product line. Management describes Century as the largest U.S. primary aluminum producer and largest employer of American primary aluminum workers. The metal feeds downstream products used in data-center racks, enclosures, busway, switchgear, thermal management, and power distribution.
The company operates smelters at Sebree, Kentucky; Mt. Holly, South Carolina; and Grundartangi, Iceland, with a carbon anode plant in the Netherlands and a 55% joint-venture interest in Jamaica's Jamalco bauxite mine and alumina refinery. Jamalco supplies alumina, Vlissingen supplies carbon anodes, each smelter buys power under long-term contracts, and Glencore and Concord Resources provide third-party alumina.
Business Segments
Competitive Landscape
Century operates in a commodity market where primary aluminum is substitutable, but management positions the company as the leading U.S. primary producer and says no company is investing more to restore American primary aluminum production. The 10-K names competitors including Alcoa, EGA, Norsk Hydro, Rio Tinto, RUSAL, and Vedanta, and lists alternative materials such as steel, copper, carbon fiber, composites, plastic, and glass.
- AlcoaCited as a competitor in documented supply evidence; Alcoa corroborates the Gulf supply shock scale.
- EGACompetitor per spider data, but also Century's 60/40 Oklahoma JV partner.
- Norsk HydroNamed in filings; not discussed in the supplied material.
- Rio TintoNamed in filings; not discussed in the supplied material.
- RUSALNamed in filings; not discussed in the supplied material.
Supply Chain
Century sits at the primary-metal layer: it buys alumina from Jamalco, Glencore, and Concord; anodes from Vlissingen; and power from named utilities, then sells aluminum to traders and downstream processors.
More on CENX: Earnings recap