Title: 🌎 The Company Keeping American Aluminum Home Subtitle: The U.S. imports most of the primary aluminum its defense industry and power grid depend on. This month's recommendation is one of the few companies still operating domestically. Show: Prinsights Pulse Premium (Substack) — August monthly issue Author: Nomi Prins Date: 2026-08-27 (AUG 27, 2026) URL: https://prinsights.substack.com/p/the-company-keeping-american-aluminum Note: Written post — no timestamps. PAID (Pulse Premium) post; body captured via Stephen's logged-in session. Verbatim body below. Model-portfolio chart + closed track record images not captured. In our January 2026 forecast, we highlighted aluminum first on our list of dark horse commodities for upside this year, and events have borne that out. This July, in our Semi-Annual Portfolio Update with Pulse Premium, we closed Constellium (CSTM), the aluminum fabricator, at a more than double return in our model portfolio in just eight months, as the physical supply squeeze we forecast set in. This month we return to aluminum with a very different company on the value chain. While Constellium was selected because it buys aluminum and fabricates it into aircraft parts, car panels, and cans, our new recommendation is one of the few companies that still smelt primary aluminum on American soil. Smelters are important because they operate industrial facilities, often with complex machinery and/or advanced furnaces, that extract pure metal from its raw ore through extreme heat and chemical reactions. For the company we detail below, because that is its primary business, its profits rise and fall with the aluminum price, the domestic premium, and U.S. trade policy more directly than a diversified miner or a downstream fabricator would. Those catalysts are all converging now. Leadership in Washington has changed the economics of American aluminum. The 50% tariff that the White House has imposed on imported metal means American buyers pay a steep premium for anything made abroad. The logic is that they will then buy domestic supply instead, and that premium goes straight to the handful of U.S. smelters still operating. Those smelters now earn more per tonne than they have in years, and with aluminum around $3,200 a tonne, that means the premium those smelters collect over the world price is close to $2,000 a tonne. The situation around domestic smelting was not always this dire. In 1980 the U.S. operated about 30 smelters and produced 4.65 million tonnes of primary aluminum, more than any country on earth. Over the decades since, one smelter after another has shut down. Turning alumina into aluminum takes about 15 megawatt-hours of electricity per tonne, roughly what a home uses in a year and a half. Complicating the matter further, American energy became too costly to compete with industry leaders across Canada, China and the Middle East, where hydro, gas, and coal energy all cost far less. Today, with only a few smelters left, output has fallen to about 680,000 tonnes, less than 2% of world supply. The rest of the world is short of aluminum, too. The structural deficit is also widening. After Gulf smelter outages this spring cut an annualized 2 million tonnes of output, Mercuria, one of the world's largest commodity traders, called the resulting shock a black swan and estimated this year's global deficit at a minimum of 2 million tonnes. The aluminum sitting in London Metal Exchange warehouses, the open pool the whole world buys from, has roughly halved this year to about 250,000 tonnes, the lowest since 1990. Meanwhile, demand keeps climbing. Aluminum is the conductor for the high-voltage lines that carry power across the grid, and nearly every new AI data center requires vast new transmission systems that use aluminum. According to research by Novelis, a leading provider of sustainable aluminum solutions, EV production alone is projected to increase aluminum demand to 31.7 million tonnes, up from 19.9 million tonnes in 2020. Yet China, the source of roughly 60% of the world's aluminum, cannot lift its output past the 45-million-tonne cap the government imposed to curb overbuilding, a ceiling its smelters have now reached. Why Washington Wants Aluminum Made at Home The U.S. government classifies aluminum as a critical mineral, one of the materials it judges vital to national security and exposed to supply disruption. Its uses are as military-driven as they are civilian-motivated. As the most widely used base metal, aluminum forms the airframes of fighter jets, the armor of light combat vehicles, and the casings of missiles and ammunition. Washington's response to its aluminum supply problem has been to impose a tariff under Section 232 of the Trade Expansion Act, a 1962 law that lets the president restrict imports that threaten national security. That tariff reached 50% in June 2025. In April, Washington widened its scope to include the full value of each shipment, metal plus fabrication and freight, not just the metal itself. As of the end of August, the White House is also ratcheting up tensions with Canada regarding that tariff, disrupting trade in Canadian aluminum imports, all while Canada is the largest foreign supplier of a metal for which the U.S. is running a supply deficit. The Premium on Every American Tonne Aluminum trades on one global benchmark, the London Metal Exchange, where the world price is near $3,200 dollars a tonne. To take delivery inside the U.S., a buyer pays that price plus a surcharge, the US Midwest Transaction Premium, now close to $2,000 a tonne. So, an American manufacturer, ranging from a carmaker to a can maker, will have to pay about $5,200 dollars for the same tonne, roughly 60% above the world price. That surcharge is driven mostly by the tariff. Imported metal has to pay it, which lifts the price of every tonne sold in the U.S., and the premium reached a record near 2,180 dollars a tonne in February, more than triple its level just 2 years earlier. Domestic smelters sell into that same U.S. price but owe no import tariff, so the premium is theirs to keep on all they sell. Because energy, a smelter's largest cost, does not rise with the aluminum price, most of that premium becomes margin, far more than a fabricator or a diversified miner keeps. Why We're Buying Now The company we are recommending today operates two of only four smelters still producing primary aluminum on American soil, and it collects the record domestic premium on everything it sells. With aluminum is scarcer than at any time since 1990, the premium is far above its pre-tariff level, and these smelters earn more on each tonne than they have in years. Recommendation: Century Aluminum (CENX) This month's Premium Pulse recommendation is Century Aluminum Company (NASDAQ: CENX). Century is one of only a handful of companies that still smelt primary aluminum in the United States, and right now, that distinction is worth more than it has been in decades. The 50% tariff on imported aluminum has pushed the U.S. Midwest premium to record levels, and every metric ton Century produces domestically captures that premium in full (as I detail below). The company also just posted its strongest quarter in years, all three of its smelters are running at or near full capacity for the first time in over a decade, and it's partnered with Emirates Global Aluminium to build the first new American smelter in almost 50 years. Let's dig in. What Century Actually Does Century smelts alumina into primary aluminum. That's the core of the business, and it's worth being precise about it, because where a company sits on the aluminum value chain determines how it makes money. Upstream, you have bauxite miners digging ore out of the ground. That ore gets refined into alumina (aluminum oxide), a white powder. The alumina then goes into a smelter, where it's dissolved in a bath of molten cryolite and hit with enormous amounts of electricity. The electricity breaks the chemical bond, and liquid aluminum collects at the bottom of the pot. That's smelting. It's the most energy-intensive step in the chain, which is why smelters are always built near cheap power. Century operates three smelters: Sebree (Robards, Kentucky): roughly 220,000 metric tons per year of capacity Mt. Holly (Goose Creek, South Carolina): roughly 220,000 metric tons per year, just reached full nameplate capacity at the end of June 2026 Grundartangi (Borgarfjordur, Iceland): roughly 320,000 metric tons per year, powered entirely by renewable hydro and geothermal energy. Century brands the aluminum produced here as Natur-Al. Running on 100% Icelandic hydro and geothermal power, the plant's carbon footprint is less than 4 metric tons of CO2 per metric ton of metal, roughly one-quarter of the industry average. That's not just marketing: the facility is ASI-certified with emissions verified under ISO 14064, and as carbon border adjustments tighten in Europe, a verified low-carbon product line is a competitive advantage most smelters can't replicate without rebuilding their entire power supply. Combined, that's about 760,000 metric tons of annual capacity across three plants. Q2 2026 marked the first time in over a decade that all three were running at (or near full) capacity simultaneously. Century also owns a 55% interest in the Jamalco alumina refinery and bauxite mining operation in Jamaica (the Jamaican government holds the other 45%). Jamalco produces roughly 1.4 million metric tons of alumina per year, giving the company significant captive alumina supply and some insulation from the spot market. Until recently, Century also operated a fourth smelter at Hawesville, Kentucky. In February 2026, the company sold it to an affiliate of TeraWulf for $200 million in cash. The site is being redeveloped as an AI and high-performance computing data center campus. It's an unusual exit, but one that makes sense. Century got $200 million for its oldest and least efficient plant, and now has three modern, fully utilized facilities instead of four operating below capacity. Why the Premium Matters More Than the Price This is the part that makes Century different from a diversified miner that happens to produce some aluminum. Aluminum trades on the London Metal Exchange (LME) at a global benchmark price, currently around $3,225 per metric ton. But to take delivery of aluminum inside the United States, a buyer pays the LME price plus the U.S. Midwest Transaction Premium. That premium is currently close to $2,000 per metric ton, driven almost entirely by the 50% Section 232 tariff on imported metal. So, an American manufacturer, whether it's making cans, car bodies, or fighter jet airframes, pays about $5,200 for a metric ton of aluminum. That's roughly 60% above the world price. Here's why this matters for Century specifically. Imported aluminum has to pay the tariff. Century's domestic smelters don't. That means they sell into the same U.S. market at the same inflated price, but they keep the premium as margin. The LME price is what it is, but the premium is pure upside for domestic producers, and Century is the largest one. The premium is also stickier than people assume. Even if the headline tariff drops (which we'll discuss more in the risks section), the structural case for domestic aluminum won't disappear. Washington has classified aluminum as a critical mineral. The defense industrial base depends on it. And the U.S. currently produces less than 2% of the world's primary aluminum with just a few smelters left. Whatever happens with trade policy in the short term, the long-term trajectory points toward more domestic production. The Numbers As we mentioned, Q2 2026 was Century's strongest quarter in years. Here are the highlights: Net sales: $752.1 million Adjusted EBITDA: $326.9 million (up from $231 million in Q1) Adjusted EPS: $2.46 (beat consensus of $2.35) Shipments: 130,632 metric tons (up 6% quarter over quarter) Keep in mind, these came on the back of already-strong Q1 numbers ($649.2 million in revenue, $170.7 million in adjusted net income). Note: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a widely used measure of a company's operating profitability that strips out financing decisions, tax environments, and accounting charges to show how much cash the core business actually generates. The balance sheet has also improved dramatically. Cash on hand was $343.4 million at the end of June, total liquidity stood at $784.9 million, and by late July, cash on hand exceeded total debt. The company also made $66 million in debt repayments during Q2 alone. A year ago, Century was a leveraged, sub-scale producer running below capacity. Today, it's net cash positive with all plants at full utilization. Next-quarter guidance points to more of the same: adjusted EBITDA of $325 to $345 million (with management citing higher volume and favorable mix). The Oklahoma Smelter In January 2026, Century joined Emirates Global Aluminium (EGA) in a joint venture to build a new primary aluminum smelter in Inola, Oklahoma. The project would be the first new aluminum smelter built in the United States in almost 50 years. The numbers are large. The target capacity is 750,000 metric tons per year, which would more than double current U.S. primary aluminum output. The estimated cost is roughly $4 billion. EGA holds 60% of the JV, Century holds 40%. The U.S. Department of Energy has committed up to $500 million in funding, and Oklahoma has pledged more than $275 million in state incentives plus discounted power rates. Additionally, in July 2026, the White House issued a proclamation creating a novel funding mechanism for companies investing in domestic aluminum production. Under the program, Century expects to be able to import up to 300,000 metric tons of aluminum per year at a reduced 25% tariff (versus the standard 50%), with the tariff savings earmarked to help fund its share of the Oklahoma build. That program starts in 2027. Construction is targeted to begin by the end of 2026, with production expected by the end of the decade. The project would create roughly 1,000 permanent jobs and 4,000 during construction. If Inola gets built (and as I discuss in the risks section, there are real hurdles to clear first), it transforms Century from a mid-size smelter into one of the largest primary aluminum producers in the Western Hemisphere. And it locks in another generation of domestic production at a time when Washington is willing to pay to make that happen. Risks The biggest risk is the tariff itself. The 50% Section 232 tariff is the single most important driver of Century's current profitability, and that tariff could change. On August 19, Bloomberg reported that the White House is negotiating a deal with Canada that would cut aluminum and steel tariffs from 50% to 25%. Century's stock dropped roughly 6% in a single session. The Midwest premium fell too. Nomi flagged this negotiation in the intro, and it deserves attention here, because it cuts directly to the question of how durable the premium is. Our view is that even a partial tariff reduction doesn't destroy the thesis. At 25%, the tariff still generates a substantial domestic premium, well above pre-tariff historical levels. But the stock will move with the headlines, and anyone buying here should understand that tariff policy is the variable that matters most in the near term. Second, customer concentration. Glencore owns 30% of Century's shares, and accounted for roughly 44% of its Q2 2026 consolidated net sales. Glencore has been a supportive shareholder and partner, but that high concentration is worth noting. Third, execution. The Mt. Holly ramp to full capacity just happened in June, and management flagged some cast house and carbon operations issues on the Q2 call that they expect to resolve by Q4. The Grundartangi smelter had an unplanned Line 2 electrical failure in October 2025 that took months to resolve. Smelters are complex operations, and unplanned outages are part of the business. Fourth, the Oklahoma smelter (the Inola project I described above) carries both execution and political risk. Oklahoma's Attorney General has filed a federal lawsuit seeking to block the project, and it has become entangled in the state's gubernatorial race. As of early August, the smelter's developers have expressed confidence it will be approved, but the litigation is unresolved. Beyond the lawsuit, there's a $4 billion price tag, a power supply agreement that's still being negotiated, and the sheer complexity of building the first new U.S. smelter in half a century. If Inola stalls or fails, it doesn't hurt the current business, but it removes the biggest long-term growth catalyst. What Moves the Stock Several of the drivers ahead are the flip side of the risks we just laid out. That's the nature of this stock: the same variables that could hurt it are the ones most likely to move it higher. The U.S.-Canada tariff negotiation is the most immediate driver, and it cuts both ways. A deal that preserves a meaningful tariff (even at 25%) could actually stabilize the stock by removing uncertainty. A deal that eliminates the tariff entirely would be materially negative. We think the former is more likely, but this is a Washington negotiation, so anything is possible. Upcoming Q3 2026 earnings (likely early November) should reflect the first full quarter with all three smelters at full capacity and the Mt. Holly expansion fully contributing. And the guidance EBITDA of $325 to $345 million reflects continuity with Q2's pace. The Inola smelter FID (final investment decision) depends on resolving the Oklahoma AG lawsuit, finalizing the power supply agreement, and completing detailed engineering. Progress on any of these could drive the stock price upward. The 300,000-metric-ton reduced-tariff import program (starting in 2027) is also a catalyst. It gives Century a direct cost advantage on imported aluminum and partially funds the Oklahoma build. And there's aluminum itself. Yes, the price is up meaningfully over the past year, but consider the backdrop. Global inventories at the LME have roughly halved this year to about 250,000 metric tons, the lowest level since 1990. Gulf smelter outages this spring took 2 million annualized metric tons offline. China has hit its 45-million-metric-ton production cap. If the supply picture stays this tight, the LME price has room to rise, and Century captures that appreciation on every metric ton it ships. Price CENX has had a significant run. The stock climbed from around $21 to a peak near $70 over the past year, tracking the tariff escalation, the premium expansion, and the Mt. Holly restart. It has since pulled back to around $44, with the sharpest move coming earlier this month after the Canada tariff headlines, as you can see below. At that price, the stock has given back about 36% from its highs. Yet, that pullback has been largely tariff-sentiment-driven. The operating business has only gotten stronger: EBITDA is at record levels, the balance sheet is net cash positive, and all plants are at full capacity. Bottom line: We view Century as a buy after this 36% pullback from the highs, and the fundamental story has only gotten stronger since the correction. Our analysis shows that the current price already reflects a meaningful discount to the tariff risk. Even at a 25% tariff instead of 50%, the domestic premium would remain well above historical levels, and Century's earnings power would still be substantially higher than anything it generated pre-tariff. The stock is trading as if that premium disappears entirely. We don't think it will. Action to Take: Consider buying shares of Century Aluminum (NASDAQ: CENX) up to $52.