Rusal · RUS:RUAL
Rusal — UC Rusal — Arab Aluminium Conference 2012
18 slides from Rusal's conference presentation, Nov 21, 2012
Slide 1: Ideas for a sustainable global aluminium balance
Ideas for a sustainable global aluminium balance 21 November 2012
Slide 2: The global aluminium industry: a time of imbalance
The global aluminium industry: a time of imbalance The China factor The Gulf region: a new global player 1
Slide 3: Despite a healthy growth in aluminium consumption…
Despite a healthy growth in aluminium consumption… Global aluminium consumption outlook remains positive… …with China accounting for a substantial part(1)… (Mt) RoW 58.2 13% 56.8 Russia 53.5 2% 47.5 45.5 China 40.6 North America 44% 38.0 37.8 34.4 35.6 12% Western Europe 14% 2006 2007 2008 2009 2010
Slide 4: …low metal prices continue to hit the industry…
…low metal prices continue to hit the industry… The metal price is well below the pre-crisis level… …while production costs have risen significantly (US$/t) (US$/t) 3 500 3 500 Unprofitable production LME+premium: ~20%(1) Unprofitable production 3 000 LME: ~30%(1) 3 000 -42% 2 500 2 500 LME + averag
Slide 5: …driving industry restructuring
…driving industry restructuring Historically, production cuts have supported the price Production cuts announced since June 2011(1) (US$/t) (Kt) 3 500 95% 8% 7% 6% 51% 8% 6% 3 000 90% 2 500 85% 2 000 80% 1 500 75% 1 000 70% Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11
Slide 6: The China factor
The global aluminium industry: a time of imbalance The China factor The Gulf region: a new global player 5
Slide 7: Chinese aluminium production is not in line with global industry
It stands out that Chinese aluminium production is not in line with global industry With aluminium production cuts lagging …accompanied by significant increases in stocks behind the wider global restructuring… and falling price… (kt) 26,856 (RMB/t) (Kt) 23,836 1 010 18 500 1 600 3 020 18 200 17 900
Slide 8: China's 12th Five-Year Plan: addressing China's aluminium needs…
China’s 12th Five-Year Plan: addressing China’s aluminium needs… What the ‘12th Five-Year Plan (FYP) for National China’s Al consumption has outperformed GDP last 10 years Economic and Social Development’ says: − It calls for rebalancing economy away from exports and 10th FYP 11th FYP 12th FYP 17,
Slide 9: …while migrating the aluminium industry to Western provinces…
…while migrating the aluminium industry to Western provinces… China capacity breakdown by region The share of western provinces in China’s aluminium production is expected to increase from 51% in 2010 to 66% in 2015 (including ~22% from Xinjiang alone) 2010A: 22mtpa(1) Jan-Sep 2012: 17mtpa(2) 2015
Slide 10: …and focusing Central China production on downstream opportunities
…and focusing Central China production on downstream opportunities Between 2003 and 2011, aluminium semis production China’s semis vs. primary aluminium output delivered 30% CAGR compared with 17% for primary (Kt) aluminium 3 000 The 12th FYP targets 9.1% CAGR of semis through focus on 2 500 val
Slide 11: The Chinese government resumes its stock-piling scheme
The Chinese government resumes its stock-piling scheme: an instrument of market support with potential profit The start of the global financial crisis in 2H 2008 led to a China Strategic Reserve Board stockpiling scheme drastic decrease in aluminium consumption, followed by a 37% slump in the SHFE
Slide 12: The Gulf region: a new global player
The global aluminium industry: a time of imbalance The China factor The Gulf region: a new global player 11
Slide 13: GCC is actively ramping up its aluminium production…
GCC is actively ramping up its aluminium production… The Gulf Cooperation Council (GCC) region is dominated by six smelters, out of which five are currently operational Aluminium production growth 2006-2011 In 2011, the smelters’ combined production reached 3.5mt of (mt) (2.7%) (0.5%) 0.1% 1.3%
Slide 14: …aiming to become one of the leading aluminium producers through new projects
…aiming to become one of the leading aluminium producers through the implementation of new projects … On the consumption side: The Middle East will increase its real consumption of primary aluminium between 2011 and 2016, mainly due to an increase in semi-fabrication capacity in GCC countries buil
Slide 15: …while investment opportunities in new aluminium capacity projects become less certain
…while investment opportunities in new aluminium capacity projects become less certain Margins of aluminium production compared to other natural gas applications 78% 75% 32% 31% 74% 29% 29% 20% 15% 1H 2011 1H 2012 1H 2013F 1H 2011 1H 2012 1H 2013F 1H 2011 1H 2012 1H 2013F SAFCO EBITDA Margin SABIC E
Slide 16: Solving the alumina puzzle – a partnership with UC RUSAL
Solving the alumina puzzle – a partnership with UC RUSAL GCC alumina balance UC RUSAL- the world’s fourth largest alumina producer (Mt) (Mt) 9,5 8,8 7,9 6,8 7,1 12,3 10,2 1,8 8,5 8,2 0,9 2011 2012 2013 2014 2015 (6,8) (7,1) (2) (7,9) (7,9) (7,7) Chalco Alcoa Rio Tinto UC RUSAL (1) GCC Alumina Consum
Slide 17: Conclusion
Conclusion Global demand for aluminium is growing at a healthy pace. However, overcapacity and overproduction require consistent restructuring and presents a real obstacle to future aluminium industry growth To date, the response of global players has been to cut production significantly. Howeve
Slide 18: Thanks for your attention
ni RUSAL Thanks for your attention 17