Global aluminiumindustry overview

May 2014

John HannaganChairman UC RUSAL Australia

Key regionsPrimary Aluminium consumption

Primary aluminium demand growth in 2014 vs 2013

Source: CRU, UC RUSAL research

2013’s global aluminum demand growth rate was at 6%. Expected another 6% growth in 2014. Largest contributors are still expected to be China, ASEAN countries and the United States

The NA consumption forecast at 3% growth on strong auto demand and stable property markets development

European consumption forecast in 2014 revised upwards to 3% from 2% mainly due to robust growth forecast in Turkey and recovering demand in Germany and GB

Expected strong growth in India, Middle East and ex-China Asia at 3-4% on strong local demand and continued growth in China as well in developed counties

Increased car production, infrastructure investments and home appliance purchases in rural areas to drive further consumption growth in China. Expected 10% aluminiumdemand growth in 2014 despite GDP growth slowdown

2

Aluminum consumption forecast strong growth through to 2018

28

37 3441

45 48 52 55 58 61 64 66

78

2003 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f 2023f

World ex-China China

+50 mln.t

… …

3%

3%

3%

3%

5%

5%

10%

3%

6%

Europe

Others

N.America

Asia ex,China

Middle East

India

China

Ex.China

World

3

Construction+ 4 mln mt

Transportation+ 5 mln mt

Engineering & Machinery+ 1 mln mt

Packaging &Foil stock+ 1 mln mt

Consumer durables+1 mln mt

Electrical+ 2 mln mt

Global primary aluminium incremental consumption will add 14 mln mt in 5 years

Automotive production growth

Aluminium content in cars increasing

Population growth and Urbanization

66 mln mtby 2018(+27%)Income increasing

Consumer behavior development

Industrialization,Technological development

Ford F-150, aluminium frame

Al/Cu substitution

Source: CRU, UC RUSAL research

2 500

2 700

2 900

3 100

3 300

3 500

3 700

3 900

4 100

4 300

4 500

2012 2013 2014 2015 2016 2017 2018

Further development of downstream industry in Middle East

4

165

80

250

175

0

150

300

450

600

750

Bahrain UAE SaudiArabia

Oman Kuwait Qatar

KM

T

WR Rolled Extruded Cast

310

175400

160

310

215

0

150

300

450

600

750

Bahrain UAE SaudiArabia

Oman Kuwait Qatar

KM

T

WR Rolled Extruded Cast

Downstream 2012 Downstream 2015 kmt 2012 2015 Add Metal Source

Cast 58 90 +32 Secondary

Extruded 503 621 +118 EMAL 60 kmt (Billets)Ma’aden 30 kmt (Billets)

Rolled 245 1,045 +800 Ma’aden 380 kmt (slab)Sohar 160 kmt (liquid)

WR 425 500 +75 EMAL 50 kmt(liquid, sow)

Total 1,231 2,256 +1,025

Source: Strategic Session 10-11 December 2013, Special Report by McKinsey & Company (ARABAL 2013)

Further strong growth in aluminum downstream industry in ME to increase local primary metal demand Further strong growth in aluminum downstream industry in ME to increase local primary metal demand

Downstream growth will be priority for Middle East inupcoming years in utilization of excess local primary metalsupply and reduction in aluminium products import

Currently according to While Gulf Cooperation Council(GCC) nations now account for about 10% of the worldsprimary aluminium production but they only produce around3% of its downstream products, and have almost noindustry in the end-use sectors

As expected ME downstream production will almost doubleby 2015 compared to 2012 production level from 1,2 mln.tto 2,3 mln.t. With most dynamics in FRP production growth.

This may potentially significantly increase local industrydemand in primary metal and thus reduce excessive supplyto open market and further improve aluminum balance

ME primary aluminium balance Kmt

609

313280

377

Alcoa RUSAL Klesch +Ormet

Rio Tinto Norsk Hydro Others

15%

647913

Source: Bloomberg, CRU, Companies announcements and reportsNotes: (1) UC RUSAL actual production cuts of 316,000 tonnes due in 2013;

Ex-China aluminum production by end of 2013 dropped by 0,7 mtpafrom beginning of 2011 well below top levels of 2008 and 2011

Producers react fast to aluminum price drops by cutting production but continue to raise production including inefficient capacity when the price recovers. This doesn’t allow the price to be sustainable

Since 2012, all major producers have executed production cuts of around 3 mtpa (around 5% of global capacity). 33% of the global (Ex-China) production is estimated to be loss-making at the current prices. As expected 1,5 mtpa more Ex.China capacity to be cut in 2014

Ex-China capacity utilization rate dropped below 75% level to crises low level of 2009 on production cuts and more unused loss-making capacity fully replicating past crises situation

Production ex-China declined on closure of unprofitable capacities

Aluminum industry ex-China made sufficient capacity curtailments for sustainable upward trend in price

Kt

21% 9% 13% 8%

% of total capacity

(1)

100%

Ex.China aluminum production Announced & actual production cuts since 2012

Operating capacity, cost and price

70%

75%

80%

85%

90%

95%

1 000

1 500

2 000

2 500

3 000

3 500

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

$/t

LME cash CRU FOC Capacity utilization rate

1800

1900

2000

2100

2200

2300

kt

World excl China (IAI + CRU)

6

8 600

8 800

9 000

9 200

9 400

9 600

9 800

Jan-

12Fe

b-12

Mar

-12

Apr

-12

May

-12

Jun-

12Ju

l-12

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Aluminum Ex.China total stocks

Aluminum visible stocks will continue declining following off-warrant stocks decline on physical market deficit Aluminum visible stocks will continue declining following off-warrant stocks decline on physical market deficit

LME registered stocks

Global aluminum stocks outside China decline steadily since beginning of 2012 by more than 1,1 mtpa YTD mainly due to decline in off-warrant stocks, producers and consumers stocks supporting our view on tight physical market supply. High physical market premiums also support this argument

High physical market demand , as expected, will make more metal outflow from LME locations mainly to off-warrartstocks. Good indication of this is soaring canceled warrant stocks reaching 47% of total LME registered stocks

Whilst total stocks are relatively unchanged, the amount on warrant has significantly reduced. Suggests that deliveriesin have been reduced whilst warrants have been cancelled for delivery out.

We expect LME visible stocks continue steady decline in main LME locations Vlissingen & Detroit during 2014 and will fall below 3,74 million by end of 2014 tonnes taking into consideration increasing physical market tightness.

As estimated total stocks are to decline by 2,7 mln.tonnes by 2015

Global aluminum stocks expected steady decline in 2014 and beyond

kt

Source: CRU, LME. UC RUSAL estimates

0

1000

2000

3000

4000

5000

6000

kt

Cancelled Warrants On Warrants

Upcoming projects doesn't compensate closing of non- profitable capacities in 2014

7

Incremental Supply structure in 2014, ex-China

• Middle East projects come in form of VAP or as part of liquid metal supply chain to integrated/cooperated downstream industry

• Development of the local downstream industry will allocate previously exported metal for domestic market (Oman: SOHAR / OARC; Mozambique: MOZAL / MIDAL; Saudi Arabia: Ma’aden / Ma’aden rolling project; Australia: TOMAGO / MIDAL, Canada / SURAL)

• Expectation of announcement about further cuts production in Brazil due to increasing of domestic electricity prices to a record of over $800 per MW/h

Region Smelter Production 2013

Production 2014

Incremental Comments

Saudi Arabia

Ma’aden 190 550 +360 kmt Alcoa’s projection

UAE EMAL 800 1100 +300 kmt In full operation from summer

Malaysia Press Metal

300 438 +138 kmt

India Angul 310 416 +106 kmt

India Hirakud 140 189 +49 kmt

India Korba 250 309 +59 kmt

Highlights 2014

• Shortage of “fresh” metal in the deficit regions like North America, Europe and SE Asia become more sizable

• Delivery of new metal in Primary ingots form to the LME warehouses is projected to be reduced significantly

153

277

679

-164

-143

-180

-329

-382

-89

-600 -400 -200 0 200 400 600 800

SE Asia

India

Middle East

Others

Europe

Oceania

Russia

N.America

Ex-China Production ex-China is projected to go down by 89 kmt in 2014 vs 2013

Ex. China aluminum balance

Continuing aluminum capacity curtailments & consumption growth will significantly improve balance in 2013-15Continuing aluminum capacity curtailments & consumption growth will significantly improve balance in 2013-15

Deficit growth by region

Aluminum consumption (Ex. China) is expected to grow at 4% CAGR in 2013-15 with consumption predicted to increase by 2 mlntonnes during this period

More that 1,2 mln. tonnes of aluminum capacity (Ex. China) has been cut in 2013(according to official announcements) another 1-1,5 mln. tonnes as expected to be cut in 2014

This supports our view that the aluminum market (Ex.China) will be in deficit of 306K in 2013 to 1,2 mln.t. in 2014 and 1 mln.t. in 2015, supporting aluminum price growth

Most aluminum deficit growing regions are South East Asia, Europe and North America increasing further deficit in 2015 Russian Government is considering the opportunity of establishing up to a 1 million tonne state reserve facility in order to support

future consumption growth on domestic market

8

Strong demand coupled with capacity closuresgenerate a significant deficit from 2014

kt

Source: CRU, UC RUSAL estimates

-5 000 -4 000 -3 000 -2 000 -1 000 0 1 000

OTHER ASIA

EUROPE

NORTH AMERICA

INDIA

CENTRAL & SOUTH AMERICA

2014F

2013

2012

-188-306

-1 199

-985

-1 135 -1 104

-948

-1 400

-1 200

-1 000

-800

-600

-400

-200

0

23

24

25

26

27

28

29

2012 2013 2014f 2015f 2016 2017 2018

Mln

mt

Production Consumption Balance (in kmt)

Aluminium premiums have bounced to record highs on strong demand and tight supply

Market premiums soared to record high on current physical market tightness. Market premiums remain well supported due to:

Supply and demand balance Market to remain very tight, with estimated 455Kt

global deficit Tradable commodity grade production to fall as

producers increase VAP output Tight primary/secondary spreads to continue to

underpin the demand for primary aluminium

Attractiveness of “cash and carry” deals

Main exposure of the financier is the mark to market value of the premium today vs end of holding period

Positions to be drip fed into the market over time, should metal financiers choose to reduce their exposure whilst preserving the premium value

Aluminium to continue to be drawn into low cost storage locations and financed for as long as the contango supports the trade

UC RUSAL believes that the broader industry context is greatly supportive of the premiums paid in the market today and for the foreseeable future

Aluminium premiums

Profitability of carry trade deals

Source: LME, UC RUSAL estimate (1) As of 01 03 2014

Source: MB

Global premiums to be supported by improved market fundamentals and strong financial demand

10 Source: Actual global balance is based on data from CRU, BrookHunt, Metal Bulletin and Aladdiny, UC RUSAL estimates for future Ex.China S/D balance, Harbor

-3 000-2 500-2 000-1 500-1 000-500-5001 0001 5002 000

1500

1700

1900

2100

2300

2500

2700

2900

3100

Ex.China balance Al real 2013 price

Current low level of aluminum price locked for 2014 guarantee an LME price below past levels & consensus estimate

Ex.China balance versus real aluminum priceAnalysts balance projection versus actual data

Current price

Real aluminum price at beginning of 2014 price level wasat a historical low despite improved market fundamentals.Thus all signaling possibility of strong price rebound in1H2014, opening a good opportunity for consumers andfinancial investors to enter the aluminum price at anattractive level

Current LME price is traded at USD102/t averagediscount to aluminum alloy price since beginning of 2014versus normal premium of USD116/t in average over2009-13

Significantly improved market fundamentals and tightmarket supply should support strong aluminum pricerebound

Aluminum price expected to rebound in 2014 and beyond

US$/t kt2 612

2 400 2 3982 173 2 079 2 019 1 945 1 867 1 865 1 850 1 700

Bul

lish

fore

cst f

or 2

014

LT p

rice

fore

cast

Ave

rage

pric

e in

201

1

Ave

rage

pric

e in

201

0

Mar

gina

l cas

h co

st, R

OW

Ave

rage

pric

e in

201

2

Ave

r. fo

reca

st fo

r 201

4

Toda

y's

pric

e to

fix

in 2

014

Pric

e in

201

3

Ave

rage

glo

bal c

ash

cost

Bea

rish

fore

cast

for 2

014

US$/t

1000

1300

1600

1900

2200

2500

2800

3100

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

LME cash Alloy cash

LME price versus aluminum alloy priceUS$/t

LME/Alloy -$102/t

China’s operating capacity

Source: UC RUSAL research, Aladdiny, BloombergNotes: (1) VAT excluded

Chinese aluminum market was facing deep transformation and imbalance in 2013 that will likely to continue in 2014 Chinese aluminum market was facing deep transformation and imbalance in 2013 that will likely to continue in 2014

Kt

11

China – continued capacity and production growth in 1H2014

In 2013 Chinese aluminium market was characterized by fallingSHFE price, increased pressure to operating capacities,commissioning of large number of new capacities and strongefforts by the Central government to control expansions andregulate Al industry

In spite of weak prices majority of new projects already built inChina were commissioning with 1.9 Mt put into operation inJan-Mar 2014

Increasing cost pressure led to 1,4 Mt of capacities leaving themarket, but net capacity increase still reached 771 Kt. Weexpect 2,5-3 Mt of new additional capacities are expected to becommissioned in China in 2014, putting more pressure toSHFE price

Up to 3 Mt of production are expected to be cut in 2014 due totight financial situation

Chinese aluminium capacity utilization rate

• Al production in 2013 reached 25.1 mln.t with apparentconsumption of 25.48 mln.t, Chinese market faced a deficit of 339kt

• Al capacity increased to 31.37 mln.t, operating rate in Al industryslump to 87%

• Al production grew – 10,9% while operating capacity showed11,9% growth, installed capacity – 11,6%

• Unlike ex.China capacity utilization rate at 74% in January of 2014,China keeps capacity utilization rate at 85% for the same period

• China needs more aggressively to cut capacity to improvealuminum balance and support aluminum price

88%87%

85%

80%

82%

84%

86%

88%

90%

15000

18000

21000

24000

27000

30000

33000

2012 2013 2014*

Production Capacity Average capacity utilization rate

* annul. production for 2014, utilization rate for January 2014

Kt27 292 230 28 063-1 3891 928

Capacity Dec2013

Idled Newcommissioning

Resumedcapacity

Capacity Mar-2014

12

… leading to SHFE price collapse and sharply increasing industry losses

Sources: Aladdiny, SMM, MB and UC Rusal Research

Chinese Smelting Cash Cost Curve evolution in 2013 China Aluminum Smelters’ Profit Margin

As expected China to cut up to 3 million tonnes of aluminium production in 2014As expected China to cut up to 3 million tonnes of aluminium production in 2014

10000

11000

12000

13000

14000

15000

16000

17000

18000

0 5000 10000 15000 20000 25000

RMB/t

Cash cost, December 2012 Cash cost, July 2013 Cash cost, December 2013

SHFE Dec 2012, RMB 15224SHFE Jun 2013, RMB 14641SHFE Mar 2014, RMB 13112

Loss-making capacities in Mar 2014 - 15.2 Mt (57%)

In 2013 Chinese Al smelting Cost curve underwent serious changes –it evolved to lower-cost position due to following factors:- high-cost capacity left the market- smelters engaged in captive PP construction thus reducing power

costs- slump in coal price helped smelters operating captive PPs to

decrease power generation costs- new capacities located in low-power price regions, entered the

market- Drop of SHFE price during Jan – Mar 2014 has made all previous

efforts of smelters on costs cutting insufficient- ~ 15.2Mtpa (~57%) of capacities became unprofitable at the

average SHFE Cash price for Mar 2014 (RMB 13,112/t)

-27%

The SHFE aluminum cash price dropped by RMB 2555/t toRMB12,565/t in Jan 2013 – Mar. 2014 but recovered a bit in April,showing 27% decrease from its peak in Jul 2011

Aluminum inventories in China started declining since May 2013and by the end of November 2013 it fell by 659Kt to 1.297 Mt,mostly triggered by increasing demand from downstream industriesand SRB’s purchase. In April spot aluminium stockpiles declined forthe first time in over a year in China amid production cuts and thedemand growth.

The aluminum smelters in Central and Southern provinces areunder increasing pressure in 2014 due to falling aluminum pricewhile large amount of low-cost aluminum capacity go intoproduction in Xinjiang and other western regions

13

Positive signs of Chinese aluminum market in March 2014

Sources: Aladdiny and UC Rusal Research

Daily average aluminum production vs capacity utilization rate

• According to Aladdiny’s data, China’s daily average aluminum production in March 2014 fell by 5.3%M-M to 75.3 kt Annualizedproduction decreased by 1524 kt to 27.5 Mt in March on the monthly basis and rose by 2501 kt from March 2013

• Capacity utilization fell to 83.8% in March from 88.8% in February 2014 and versus 90.5% in March 2013

• The strong rise in apparent consumption and production decrease in March led to 26 kt supply deficit after big surplus in Jan-Feb2014

• Net operating capacity rise was only 771kt as of March 2014 due to 1,4 mln tonnes of capacity cuts. We expect this trend to becontinued with possibility of negative rise in 2H14

Monthly Primary Aluminum Fundamentals

Chinese aluminum market recovery is underway with expected strong recovery in 2H2014Chinese aluminum market recovery is underway with expected strong recovery in 2H2014

15

China State Council guidance on addressing severe overcapacity and its impact on aluminum industry

China aluminum balance 2012 - 2017

Eliminate prebaked anode cells (＜160,000A) before end of 2015

Power tariffs raise by 10% for AL smelters with AC power consumption over 13,700kw*h/t and for capacities which fail to meet standards before the end of 2015 - multi-step electricity pricing Local governments are forbidden to introduce preferential electricity price policies, cheap land, tax breaks . Measures should be taken torelocate aluminum smelters to regions with abundant hydro powerAluminum smelters are encouraged to sign long-term power supply contracts with power plants

Chinese enterprises are encouraged to build aluminum smelters overseas where energy is rich

Measures in aluminum industry

1

2

3

4

5

Kt Kt

Source: MIIT State Council’s guidelines as of October 16, UC RUSAL research

Policy overview On Oct-15, 2013 the State Council issued its “guiding opinions” ordering a halt in the construction of new capacity in sectors

burdened by excess production facilities in the steel, flat glass, cement, electrolytic aluminum and shipbuilding industries, inparticular

Projects where construction hadn’t yet started should be canceled; Projects under construction to be halted unless they receive central government approval Barriers to entry and environmental standards will be two key indicators for phasing out old or adding new capacity Banks have been ordered to write off some of the nonperforming loans on their books and prohibited to grant loans for new

projects in industries with overcapacity

On Nov-5, 2013 China’s central ministries sent a stern message in support of the key State Council document implementation According to Hu Zucai, deputy director of the NDRC, local governments will be held accountable regarding overcapacity. Those who continue to violate these guidelines will be heavily punished

Chinese aluminum growth will slow down, capacities will move to the North-western parts of the country, only modern and integrated players will survive. China is not likely to have a surplus before 2015

Chinese aluminum growth will slow down, capacities will move to the North-western parts of the country, only modern and integrated players will survive. China is not likely to have a surplus before 2015

-339

-220

-700-800

-750

-900-800-700-600-500-400-300-200-1000

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2013 2014F 2015E 2016E 2017E

Production Apparent consumption Balance

15

Indonesian supply ban to hit 18 mln tonnes of Chinese alumina production with rising bauxite cost

Proven bauxite reserve in China amounts to 17.8 billion tonnes, the inferred bauxite resource - 16.3 billion tonnes, mostly in Shanxi, Henan, Guangxi, Guizhou and Yunnan provinces.

Extractable reserves of 539 million tonnes (2012), sufficient for 6-7 years of current domestic bauxite consumption

Dominantly diaspore, with high alumina content but low Al/Si ratio – expensive to process

Over 400 deposits

Bauxite reserves and production

Source: Ministry of Land and Resources, China Non-ferrous Metals Association, Aladdiny, SMM, China Customs, UCR research

ShanxiHenan

GuizhouGuangxi

Domestic bauxite production in 2013 is evaluated at about 73-74 million tonnes in comparison to 18 million tonnes in 2006.

China also is still one of the largest world bauxite importers and its bauxite self-sufficiency rate in 2012-2013 was about 61-63%. Indonesian bauxite import accounted for 70% of total

China’s bauxite import rose to record 71.6 million tonnes in 2013 (+79% YoY). Such a growth was stipulated by bauxite stockpiling during the year before Indonesia’s export ban implementation in Jan 2014.

Bauxite supply balance in China

Indonesian bauxite ban to increase Chinese aluminum cost by USD80-100/tonne through the alumina chainIndonesian bauxite ban to increase Chinese aluminum cost by USD80-100/tonne through the alumina chain

16

Jiangsu

Xinjiang

Hunan

HubeiAnhui

Zhejiang

Fujian

Jiangxi

Hainan

GuangxiYunnan

Guizhou

Sichuan

Shanxi

Hebei

Liaoning

NingxiaShaanxi

Heilongjiang

Jilin

Shanghai

Beijing

Tianjin

Tibet (Xizang)

Inner Mongolia

Qinghai

Shandong

HenanGansu

Source: Aladdiny, UC RUSAL research

Chongqing

Developing Xinjiang as a smelting hub increases the overall distance of the bauxite-alumina-aluminium-market supply chain from 4,000 km to 11,000km, 2/3 of which is by rail transport

1

Coupled with higher transportation costs as aluminum industry relocation to the West

Despite cheaper power costs NW producers face higher transportation costs and imported bauxite cost

•Bauxite is shipped ~ 4,200 km from Indonesia to Shandong ports•Alumina is transported by rail ~ 3,500 km from Shandong to Xinjiang•Aluminium is transported by rail ~ 4,200 km from Xinjiang to customers•Xinjiang vs East China - additional transportation cost of 290USD/t

Guangdong

17

China to import more aluminum after 2015 lifting seaborne alumina prices

Installed alumina capacity in China, 2013 Chinese alumina self-sufficiency

Source: Aladdiny, AsianMetal, UC RUSAL research

China alumina balance, mln. mt

Alumina production in 2013 increased to 49 million tonnes (+14% YoY). Utilization rate – 80%.

Installed alumina capacity at the end of 2013 reached 60.9 Mln t/y, running capacity – 54 Mln t/y.

Most of alumina production is concentrated in Shandong (30%), Henan (23%) and Shanxi (22%) provinces.

China’s alumina import fell to 3.8 million tonnes in 2013 from 5 Mt in 2012 but expected to grow to 5,5 Mt in 2014 and to 10 Mt by 2018. Significant aluminna import to China after 2015 will lift seaborne alumina prices

>15 Mt/a

10-15 Mt/a

5 -10 Mt/a

<5 Mt/a

3

4

5

6

7

8

9

10

40

45

50

55

60

65

70

75

80

2012 2013 2014e 2015f 2016f 2017f 2018f

Consumption Own production Import

Chinese semis export influences ex.China semis market not primary aluminum supply/demand balance

Source: Macquarie research, CRU, China Customs, Press releases

China is a major net exporter of semis… …while a number of countries have already introduced protective antidumping measures(Kt)

Global aluminum semis consumption

12% of primary aluminium consumption in China accounts forsemis production, which is subject to further export

For 2011-2013 period Chinese semis net export grew just by 4%. InJan -Feb 2014 net semis export from China was down by 4% YoY.

Chinese semis export passes only 6% of global semisconsumption,

As for the end of 2012 Japan, South Korea, Malaysia and Thailandaccounted for the major part of Chinese alloys export

At the same time throughout 2009-2012 a number of regions, suchas USA, EU countries and Australia introduced protectiveantidumping measures against Chinese aluminium semis

China is importing up to 2,7 million tonnes of aluminum scrapannually, thus is a short of aluminum materials supply

(USD/t)

Product: Al extrusionsDuty: 32.8%-33.3%

Products: Al wheels, Al foil, Al radiators Duty: 20.6%, 30%,61.4%

Product: Al extrusionsDuty: 3.8%-33%

China

Australia

USA

EU

Further growth of Chinese semis is limited by LME/SHFe price arbitrage and global protectionism measures

20 000

21 000

22 000

23 000

24 000

25 000

26 000

27 000

28 000

29 000

30 000

0

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009 2010 2011 2012 2013e

RoW semis consumptionChinese semis consumptionChinese net-export of semisEx.China aluminum demand

(Kt)(Mt)

1 200

1 700

2 200

2 700

3 200

-350-250-150

-5050

150250350450550

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Aluminium ingot Aluminium alloys Aluminium semisAluminium scrap Net balance LME (rhs)

Source: CRU, UC RUSAL estimate

Global aluminum product balance (including primary and secondary)

Total Al Balance model (including primary and VAP),kt

Global aluminium semis demand , kt

Total Al Balance model by region , kt

19

2012 2013 2014 2015 2016 2017 2018Supply 67 406 70 260 74 032 78 286 82 590 87 148 91 471Demand 67 268 70 960 75 658 80 383 84 755 88 683 92 538Balance 139 -700 -1 626 -2 097 -2 164 -1 536 -1 068

2012 2013 2014 2015 2016 2017 2018NORTH AMERICA 133 85 -464 -481 -671 -747 -651CENTRAL & SOUTH AMERICA 737 754 643 436 427 524 524EUROPE -2 444 -2 806 -3 215 -3 456 -3 630 -3 785 -3 873CIS & RUSSIA 3 146 2 834 2 493 2 619 2 745 2 878 3 190CHINA -2 410 -2 979 -2 945 -3 450 -3 385 -2 900 -2 650INDIA -772 -617 -539 -280 -81 -7 -143JAPAN, S.KOREA, SE ASIA -5 013 -4 982 -5 041 -5 043 -5 183 -5 326 -5 406MIDDLE EAST & OTHER ASIA 3 215 3 457 4 085 4 433 4 437 4 592 4 763AFRICA 1 135 1 279 1 240 1 157 1 148 1 192 1 156AUSTRALASIA 2 086 1 990 1 816 1 649 1 688 1 694 1 673Other 326 285 300 320 340 350 350TOTAL 139 -700 -1 626 -2 097 -2 164 -1 536 -1 068

CRU 2012 2013 2014 2015 2016 2017 2018Total global semis production 65957 69525 73994 78583 83156 87000 90850Al/Semis conversion 98,1% 98,0% 97,8% 97,8% 98,1% 98,1% 98,2%

of which Rolled products 20237 21394 22687 23977 25248 26325 27350Extrusions 21634 22668 24074 25560 27105 28473 29700Castings 15094 15815 16782 17911 18987 19977 21000Wire & cable 7343 7980 8714 9323 9940 10325 10700Other 1649 1668 1737 1812 1876 1900 2100

As expected total aluminum market balance to be in significant deficit in 2014 and beyond

Secondary aluminum will not significantly influence the balance based on current tightness and more balanced market growing forward

EU, China and other Asia regions will remain the most deficit markets for raw aluminum (including primary ingots and scrap)