Century Aluminum may soon shut more smelter output

NEW YORK, April 24 (Reuters) - Century Aluminum Co (CENX.O) may cut its smelter output further amid excess supply that is keeping prices below many producers' cash costs.

Century Chief Executive Officer Logan Kruger noted that Century's 28 percent capacity curtailment already puts it among the world's biggest slashers of aluminum output during the current economic downturn.

"This puts us at the high end of curtailments compared to other industry players, but we are prepared to take further steps to reduce production levels if the economics make sense," the CEO told analysts on a conference call earlier this week.

Century executives said they were talking with suppliers, customers, and business partners about further output cuts.

"Everything is in the mix at this point in time," said Chief Financial Officer Mike Bless, adding that each of its plants had a unique set of considerations.

More specifically, Chief Operating Officer Wayne Hale said the company may decide to close another potline at the Hawesville, Kentucky, smelter sometime soon.

At "Hawesville, we curtailed Line 5 in early March, and the plant is now operating efficiently at an annual capacity of around 200,000 tonnes per year," Hale said. "At this point, I can say there appears to be benefits to curtailing an additional potline."

He said another closure was "being considered for sometime in the near future, and if completed, would represent an additional 50,000-tonne reduction.

"We are in discussions with our customers and suppliers to ascertain if and when the curtailment of additional capacity is feasible and makes economic sense," he added.

Hawesville is currently operating four lines to supply metal to privately held Southwire Co, but could take down an additional line and still supply Southwire with three lines.

In March, Century closed a 52,000-tonne-a-year potline at the Hawesville smelter, bringing its total shutdowns to 220,000 tonnes a year, or 28 percent of its 2008 production capacity.

In February, Century completely shut its 170,000-tonne-a-year Ravenswood, West Virginia, facility.

Earlier this week, the Monterey, California-based producer reported a wider-than-expected loss in the first quarter after slashing production to combat weak demand for aluminum and a drop in sales over more than 50 percent.

Results for the most recent quarter included a charge of $24.3 million related to job cuts and other costs stemming from production cuts at Ravenswood and Hawesville.

Ravenswood is operating in a care-and-maintenance mode with a support staff of 28 people. It expects to cut another four to five jobs over the next couple of months.

The plant's union contract expires at the end of May and Hale said Century is working with the union to begin talks.

"We look forward to the new contract being an enabler when it's time to consider restarting the plant," the COO said.

Kruger said the company had not seen many concrete signs of improvement in its end markets, either in North America or around the world. But there were signs of stabilization, particularly from China's recent increased level of activity.

"Until we see more evidence, it's difficult to gain much confidence at this time. The industry remains in an oversupplied position," the CEO said.

Moreover, the executives said they believed rumored Chinese smelter restarts were already underway in localized areas where the social impact of unemployment was being weighed against the high power use to run the plants. (Additional reporting by Nichola Groom in Los Angeles; Editing by Christian Wiessner)