Aluminum for delivery in three months fell to $1,549.50 a ton on the London Metal Exchange on Tuesday.
Prices for the metal were falling due to lower demand for both aluminum and copper in China, according to Bloomberg. The country consumes about 40% of the annual global copper supply, and about half of the annual global supply of aluminum, according to the news service.
"The Chinese situation is crucial for metals in general, and there's little incentive to buy the market," Logic Advisors Partner Bill O'Neill told Bloomberg.
Century Aluminum is a Chicago-based aluminum producer that operates smelters in the U.S. and Iceland.
About 3.3 million shares of Century Aluminum were traded by 12:59 p.m. Tuesday, above the company's average trading volume of about 2.7 million shares a day.
TheStreet Ratings team rates CENTURY ALUMINUM CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CENTURY ALUMINUM CO (CENX) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 14.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- CENX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that CENX's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- Net operating cash flow has significantly decreased to -$5.95 million or 130.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 266.6% when compared to the same quarter one year ago, falling from $20.34 million to -$33.90 million.
- You can view the full analysis from the report here: CENX Ratings Report