Specialist
Former director at United Co Rusal IPJSC
Agenda
- 2022 global supply and demand outlook, price volatility and production capabilities
- Russia-Ukraine situation, including sanctions and effect on Rusal (MOEX: RUAL) (HKG: 486)
- Russia-Ukraine situation’s value chain effects from suppliers to consumers in the transportation, construction and packaging sectors
Questions
1.
What are the key trends investors should be paying attention to within the aluminium market? Do you have any thoughts on demand and pricing currently?
2.
You mentioned some of the core end markets. Can you discuss each one of the core end markets for aluminium, transportation, construction and packaging? You mentioned that some have recovered or are growing quicker than others. Can you expand on each of those and the demand and growth trends for each?
3.
You’re expecting the supply-and-demand gap near term particularly in transportation to get wider before it gets smaller. Is that a fair assessment?
4.
What has been the driver behind the US cutting aluminium production? Is it just a cost advantage in other geographies?
5.
Would you consider the supply of the transport companies that do have aluminium contracts in place to be secure at this point, depending on how long those contracts last for?
6.
You mentioned construction as being a core consumer as aluminium. Can you discuss the applications, what portion of demand that makes up and how that’s recovered since coronavirus and demand trends there?
7.
You mentioned rising energy costs. It sounds like that hasn’t necessarily impacted the utilisation rates of smelters by region. Can you clarify that, or is that the case overall?
8.
In April 2022, we’re expecting Russia’s production numbers to be cut approximately 25% because that accounts for Ukraine’s alumina supply to Russia. Is that correct?
9.
Ultimately, if things are to progress directionally in the way that you’re describing, obviously, aluminium producers are still at maximum capacity, so there will be some aluminium flowing into the market. However, are we likely to see factory floors stop production in certain times? Are we likely to see auto manufacturers, canning lines and stop production due to the lack of aluminium? Is that ultimately what plays out over the course of the next three weeks to one month?
10.
I assume that the market is either approaching a price point, or producers, as you described in Canada, although it’s fairly minimal capacity in the grand scheme of things, we must be approaching a market price point where they’re at least considering bringing idled capacity back online. Are we approaching that price point? Are those conversations likely happening, or not at this point?
11.
Have there been any significant capacity announcements, whether it be greenfield projects, that I understand that it would take time to get any additional capacity into the market? Should we be expecting to see announcements shortly here?
12.
What are the current challenges and opportunities that the producers are weighing? Is it fair to say that aluminium scraps and inputs, alumina, are plentiful still to these producers, or are there challenges even in that regard?
13.
You mentioned that typical companies that would be typically insuring freight have refused to do so. You mentioned that there are financial or payment issues in terms of the Russia sanctions and Russia’s financial system essentially being cut off. Can you expand on that?
14.
You mentioned you have your own pricing expectations. Where are we headed from a global aluminium supply and pricing standpoint?
15.
Is there anything additional that you would like to highlight or discuss that we haven’t discussed?
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