THE NORTH AMERICAN ALUMINUM MARKET 7th INTERNATIONAL ALUMINUM CONGRESS & EXHIBITION

July, 2015

Ryan Olsen VP, Business Information & Statistics

The Aluminum Association

WHO WE ARE The Aluminum Association

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Located in Washington, DC area

80-Year Old Trade Association

Originally Created in Response to an Act of Congress in 1933

Represent $65B+ U.S. Aluminum Industry

Promote Aluminum as the Most Sustainable Material in Today’s Market

104 Member Companies: U.S. and Foreign Primary Producers,

Recyclers, Fabricators, & Suppliers

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OUR ROLE Positioning the Metal

Growing Aluminum’s Voice Developing Key Research

Essential Standards & Business Data Enhancing Industry Safety

THE INDUSTRY TODAY

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• Apparent Consumption up 10% YTD

• YTD 2015 - Demand up 4.7%

• Demand up 3.6% Y/Y in 2014 Approaching Mid-2000s record levels

THE INDUSTRY TODAY

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• Containers & Packaging up 0.4% Y/Y ↓4.7% since 2009

• Building & Construction up 7% Y/Y ↑19% since 2009

• Transportation market up 11% Y/Y ↑95% since 2009

• Exports down 6% Y/Y

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SUPPLYING THE METAL

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PRIMARY & SECONDARY

DECLINING SCRAP EXPORTS

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INCREASING ROLE OF IMPORTS

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GROWTH IN CHINESE IMPORTS

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GROWTH IN CHINESE IMPORTS

ASSOCIATION RESPONSE

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Advocate for sustainable industrial production and manufacturing

Provide business intelligence on emerging trends

Address data transparency and misclassification concerns for Al products, e.g. outreach to U.S Customs

Support federal policy to open foreign markets for U.S. manufacturers via trade agreements

Continue the dialogue: • Global Aluminum Association Leaders (August) • World Customs Organization (Sept.) • Aluminum Assoc. Annual Meeting (Oct.) • China International Aluminum Industry Week (Oct.) • Conference of Parties (Dec.)

The Association will advocate for policies that ensure a level playing field so that all aluminum producers can compete fairly. In addition, we will:

CHINA AND ENERGY INTENSIVE PRODUCTS

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“[China will]…further restrict the exports of products that are energy intensive, pollution intensive, and resource intensive - thus encouraging energy efficiency improvement (in production) and imports of resource intensive materials.”

- Chinese Ministry of Finance, July 2007 referring to import/export duties on Al rod and bar products

THE DIALOGUE

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The Aluminum Association: “…the elimination of these export duties is inconsistent with China’s policy to discourage exports of energy-intensive products, a key element of the country’s “new normal” that puts emphasis on sustainable, quality growth…”

China Non-ferrous Industries Association: “As to the Statement, we are sorry to see that you have released it. Aluminum rods and bars are classified into processing products catalogue. No big affects [sic] will be caused to the market after the export duties eliminated...”

GLOBAL RESPONSE

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• June 2015 call for government intervention to address increased imports

• Suggests that Chinese aluminum industry has unfair advantages due to government backing

• Joined an alliance of industries against granting China market economy status

STRATEGIC QUESTIONS

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• Is China committed to its sustainable industrial production policies?

• Is China’s production responding to market forces, like the rest of the world, or are other goals being pursued?

• Where is misclassification of aluminum occurring and is there circumvention of current government agreements?

• What is the US aluminum industry position on ‘Market Economy Status’ for China?

• Will China’s proposed plans for carbon emission reductions address the rapid growth in China aluminum emissions?

What concerns are US Government stakeholders raising with US industry?

POSITIVE INDICATORS

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• YTD Demand for Mill Products: • Total = +9.8% • Sheet & Plate = +12.6% • Extruded Prod. = +9.4%

• YTD Mill Product Orders: • Total = +5.8% • Heat Treat Sheet = +20.5% • Extruded Products = +6.3%

POSITIVE INDICATORS

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• 2009-2014: +81.1%

• 2013 – 2014: +8.5%

• 2015 YTD: +10.9%

• 2009-2014: +5.6%

• 2013 – 2014: +6.5%

• 2015 YTD: +5.9%

POSITIVE INDICATORS

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• 2009-2014: +97.2% • U.S.= +103.9% • Mex.= +112.6%

• 2013 – 2014: +4.9%

• U.S.= +5.1% • Mex.= +9.7%

• 2015 YTD: +2.3%

• U.S.= +2.7% • Mex.= +8.6%

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THE INDUSTRY OPPORTUNITY

1930s & 1940s 1950s & 1960s 1970s, 1980s & 1990s

Today

Through the Years

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THE AUTOMOTIVE OPPORTUNITY

Today

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LIGHTWEIGHTING REVOLUTION

ALMMII

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MEETING THE DEMAND

• $2.3 billion+ in capital investment announced in U.S. since Fall 2013

• Est. 2 billion lbs of capacity next 5 to 10 years • Alcoa: Davenport, IA & Alcoa, TN • Aleris: Lewisport, KY • Novelis: Oswego, NY • Constellium: Acquired Wise Metals

Major Industry Investment

JOIN THE CONVERSATION

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@AluminumNews

www.aluminum.org

/AluminumAssociation