Standard & Poor's Ratings Services raised its outlook on junk-rated Century Aluminum Co. (CENX) back to stable from negative, citing high aluminum prices.
Prices for the metal should stay high enough over the next year to help fund a large part of the company's second planned Icelandic smelter while still maintaining strong liquidity, S&P said.
At the same time, the volatility and cyclicality of the aluminum industry present risks to its business. S&P pointed to Century Aluminum's high cost position in the U.S. and limited product diversity.
The ratings agency affirmed its B rating, which is five steps below investment-grade territory.
In May, Moody's Investors Service issued a three-notch upgrade, citing its strong cash balances and an improved financial performance. Moody's now rates the smelter at B3, one notch below S&P's rating.
Shares were recently up 1.9% to $15.94 Friday. The stock is off 16% over the past three months.
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