Reduce holdings by 10%! Can Glencore cash out Century Aluminum and the 50% aluminum tariff in the United States become a “withdrawal password”?

On November 18th, global commodity giant Glencore completed a reduction in its stake in Century Aluminum, the largest primary aluminum producer in the United States, from 43% to 33%. This reduction in holdings coincides with a window of significant profit and stock price increases for local aluminum smelters after the increase in US aluminum import tariffs, allowing Glencore to achieve millions of dollars in investment returns.

The core background of this equity change is the adjustment of US tariff policies. On June 4th of this year, the Trump administration in the United States announced that it would double the aluminum import tariffs to 50%, with a clear policy intention of encouraging local aluminum industry investment and production to reduce dependence on imported aluminum. Once this policy was implemented, it immediately changed the supply and demand pattern of the US aluminum market – the cost of imported aluminum increased significantly due to tariffs, and local aluminum smelters gained market share through price advantages, directly benefiting Century Aluminum as the industry leader.

As the long-term largest shareholder of Century Aluminum, Glencore has a deep industrial chain connection with the company. Public information shows that Glencore not only holds equity in Century Aluminum, but also plays a dual key role: on the one hand, it supplies the core raw material alumina for Century Aluminum to ensure its production stability; On the other hand, it is responsible for underwriting almost all aluminum products of Century Aluminum in North America and supplying them to domestic customers in the United States. This dual cooperation model of “equity+industry chain” enables Glencore to accurately capture the fluctuations in operating performance and valuation changes of Century Aluminum.

The tariff dividend has a significant boosting effect on the performance of Century Aluminum. Data shows that Century Aluminum’s primary aluminum production reached 690000 tons in 2024, ranking first among primary aluminum production companies in the United States. According to Trade Data Monitor, the US aluminum import volume for 2024 is 3.94 million tons, indicating that imported aluminum still holds a significant market share in the US. After the tariff increase, imported aluminum producers need to include 50% of the tariff cost in their quotations, resulting in a sharp decline in their price competitiveness. The market premium of local production capacity is highlighted, directly promoting the profit growth and stock price increase of Century Aluminum, creating favorable conditions for Glencore’s profit reduction.

Although Glencore reduced its stake by 10%, it still maintains its position as the largest shareholder of Century Aluminum with a 33% stake, and its industrial chain cooperation with Century Aluminum has not changed. Market analysts pointed out that this reduction in holdings may be a phased operation for Glencore to optimize asset allocation. After enjoying the benefits of tariff policy dividends, it will still share the long-term dividends of the development of the domestic aluminum industry in the United States through its controlling position.