XML 32 R21.htm IDEA: XBRL DOCUMENT
v3.23.3

Derivatives | 9 Months Ended
--- | ---
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | DerivativesAs of September 30, 2023, we had an open position of 74,993 tonnes related to LME forward financial sales contracts to fix the forward LME aluminum price. These contracts are expected to settle monthly through December 2024. We have also entered into financial contracts with various counterparties to offset fixed price sales arrangements with certain of our customers ("fixed for floating swaps") to remain exposed to the LME and MWP aluminum prices. As of September 30, 2023, we had 949 tonnes related to fixed for floating swaps that will settle monthly through November 2023. We have entered into financial contracts to hedge a portion of Grundartangi's exposure to the Nord Pool power market (“Nord Pool power price swaps”). All of the Nord Pool power price swaps are expected to cash settle monthly through December 2023. The Nord Pool power price swaps are settled in Euros; therefore, we have entered into financial contracts to hedge the risk of fluctuations associated with the Euro ("FX swaps"). As of September 30, 2023, we had an open position related to the FX swaps of €8.2 million that will settle monthly through December 2023. During the third quarter of 2022, we entered certain floating Nord Pool financial contracts to unwind a portion of our fixed contract position, making us predominantly hedged against Nord Pool power price fluctuations during 2023. As of September 30, 2023, we had an open net position of 249,612 MWh related to the Nord Pool power price swaps that will settle monthly through December 2023. We have entered into financial contracts to fix a portion of our exposure to the Indiana Hub power market at our Kentucky plants ("Indiana Hub power price swaps"). As of September 30, 2023, we had an open position of 44,160 MWh. The Indiana Hub power price swaps are expected to settle monthly through December 2023. We have entered into forward contracts to hedge the risk of fluctuations associated with the Icelandic Krona (ISK) and Euro for contracts related to the construction of the Grundartangi casthouse and the Sebree casthouse project denominated in these currencies ("casthouse currency hedges"). As of September 30, 2023, we had an open position related to the ISK casthouse swaps of kr1.7 billion that will settle monthly through January 2024. As of September 30, 2023, we had an open position related to the Euro casthouse swaps of €5.3 million that will settle monthly through January 2024. We have entered into financial contracts to hedge a portion of our exposure at our operations to the NYMEX Henry Hub (“NYMEX Henry Hub natural gas price swaps”). The natural gas volume is measured per million British Thermal Units ("MMBtu"). As of September 30, 2023, we had an open position of 900,000 MMBtu. The NYMEX Henry Hub natural gas price swaps are expected to settle monthly through December 2023. We have entered into financial contracts to hedge a portion of our exposure at our operations to Heavy Fuel Oil (“HFO price swaps”). The HFO volume is measured per barrel. As of September 30, 2023, we had an open position of 100,000 barrels. The HFO price swaps are expected to settle monthly through March 2024. Our agreements with derivative counterparties contain certain provisions requiring collateral to be posted in the event the market value of our position exceeds the margin threshold limit of our master agreement with the counterparty. As of September 30, 2023 and December 31, 2022, the Company had not recorded restricted cash as collateral related to open derivative contracts under the master arrangements with our counterparties. The following tables set forth the Company's derivative assets and liabilities that were accounted for at fair value and not designated as cash flow hedges as of September 30, 2023 and December 31, 2022, respectively:
|  | Asset Fair Value
|  | September 30, 2023 |  | December 31, 2022
Commodity contracts(1) |  | $ | 12.4 |  |  | $ | 129.1 |
Foreign exchange contracts(2) |  | — |  |  | — |
Total |  | $ | 12.4 |  |  | $ | 129.1 |
|  | Liability Fair Value
|  | September 30, 2023 |  | December 31, 2022
Commodity contracts(1) |  | $ | 8.4 |  |  | $ | 23.7 |
Foreign exchange contracts(2) |  | 2.0 |  |  | 7.3 |
Total |  | $ | 10.4 |  |  | $ | 31.0 |
(1)Commodity contracts reflect our outstanding LME forward financial sales contracts, fixed for floating swaps, Nord Pool power price swaps, NYMEX Henry Hub natural gas price swaps, HFO price swaps, and Indiana Hub power price swaps. At September 30, 2023, $2.3 million of Due from affiliates, $5.6 million of Due to affiliates, and $1.7 million of Due to affiliates - less current portion were related to commodity contracts with Glencore. At December 31, 2022, $11.9 million of Due to affiliates, and $8.3 million of Due to affiliates - less current portion were related to commodity contract liabilities with Glencore. (2)Foreign exchange contracts reflect our outstanding FX swaps and the casthouse currency hedges. The following table summarizes the net (loss) gain on forward and derivative contracts:
|  | Three months ended September 30, |  | Nine months ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Commodity contracts(1) |  | $ | (24.8) |  |  | $ | 120.0 |  |  | $ | (74.9) |  |  | $ | 301.3 |
Foreign exchange contracts |  | (0.4) |  |  | (7.4) |  |  | 1.2 |  |  | (13.6) |
Total |  | $ | (25.2) |  |  | $ | 112.6 |  |  | $ | (73.7) |  |  | $ | 287.7 |
(1)For the three months ended September 30, 2023, $3.1 million of the net loss was with Glencore, and for the three months ended September 30, 2022, $13.1 million of the net gain was with Glencore. For the nine months ended September 30, 2023, $6.6 million of the net loss with Glencore, and for the nine months ended September 30, 2022, $19.4 million of the net gain was with Glencore.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration