Glencore cuts Century Aluminum stake to 33% after tariff-driven rally

Glencore sold 9 million shares on November 10 Glencore converts preferred stock to ordinary shares Century’s shares up 80% since June By Pratima Desai LONDON, Nov 18 (Reuters) - Glencore (GLEN.L) has cut its stake in Century Aluminum (CENX.O) by 10% to 33%, raking in millions following a share price rally triggered by U.S. tariffs on aluminium imports and a profit bonanza for local aluminium smelters. U.S. President Donald Trump doubled tariffs on aluminium imports to 50% on June 4 with the aim of incentivising investment in production of the metal in the United States. London-listed Glencore is Century’s largest shareholder. It supplies Century with alumina, a feedstock for aluminium, while buying nearly all of its North American aluminium production for U.S. customers. It sold nine million shares of its 40 million holding on November 10 for $272.25 million and converted all of its Series A Convertible Preferred Stock into 4.95 million ordinary shares, according to a regulatory filing in the United States. CONFIDENCE IN CENTURY’S MANAGEMENT Century’s stock was trading around $28 on Monday and is up 80% since June due to soaring U.S. aluminium prices as the market priced in the tariff and the incentive needed for producers to keep shipping to the United States. Glencore’s transactions leave it holding around 36 million shares, equating to about 33% of Century’s equity, down from 43% previously. The commodity trader and miner has had a stake in Century for around 30 years. In another regulatory filing, Glencore said it remained confident in Century’s management team and that it had taken “action to monetise” a portion of its investment. Century is the largest primary aluminium producer in the United States where last year it produced 690,000 metric tons of the metal used in the construction as well as power and packaging industries. The United States relies on aluminium imports, which last year amounted to 3.94 million tons, according to information provider Trade Data Monitor. For producers to keep shipping aluminium to the United States, the prices they charge need to cover the tariff. Consumers in the United States buying aluminium on the physical market pay the benchmark price on the London Metal Exchange (CMAL3) plus the Midwest premium that covers costs such as freight and taxes. LME aluminium touched $2,920 on November 3, the highest since May, partly due to tight markets while the U.S. premium hit a record 88.21 U.S. cents per pound or $1,944 a ton (AUPc1) last week.