Weekly Material Matters: Risk on, Risk off

Research evidence excerpt

Weekly Material Matters: Risk on, Risk off

Weekly Material Matters: Risk on, Risk off Equity Research

Welcome to the Wells Fargo Metals & Mining & Materials (M&M&M) weekly - our regular assessment

of key issues in our coverage. We'll review key news flow and debates in the group, with our opinions

sprinkled in. Feedback and suggestions are always welcome.

The Weekly Natural Resources webinar is back this Monday.

End-of-quarter catch-ups

CENX said Q2 broadly tracked expectations, with slightly favorable MISO pricing (tracking ~$38/MWh

vs. $41/MWh guidance). Jamalco bauxite quality remained a cost pressure (previously identified as a ~

$10M headwind for Q2E), while Mt. Holly neared full utilization on its 50Kt potline restart and Iceland

trended slightly ahead of schedule (near full output by July). The company said it was making solid

progress on the greenfield Oklahoma smelter with EGA, with Bechtel pre-engineering key to updated

capex and financing clarity. As of the June 26 call, no incremental insurance proceeds or 45X refunds

had been received.

CSTM said Q2 had largely tracked expectations, with solid scrap visibility underpinning results. We

think the recent pullback in LME prices will not force and guidance downgrades if sustained given

already conservative management assumptions. Management should have good line of sight on

Q3E when it reports in late July, and solid visibility into Q4E scrap prices. End markets trended within

expectations, if not marginally better, it said, describing aero/industrial steady, packaging stable, and

auto soft but as expected. Management said scrap supply was not an issue although Novelis’ Oswego

ramp and eventual Bay Minette startup in H2E, although more of a 2027E story, could tighten used