©2013 Novelis Inc.

Nick Madden, SVP and Chief Supply Chain Officer

Arabal Conference 2013

How did this situation develop?

Three Questions

What are the key problems?

What are the potential solutions?

Novelis in One Slide!

3 Source: Novelis estimates, 2012 data

33%in 2010

50% by

2015

80% by

2020

39% in 2012

43% in 2013

80%GOAL

14%

10%

5%

4%4%

4%

57%

Novelis #1 Rolled Products Supplier Worldwide

World’s largest recycler of aluminum

4

Why has Novelis been so vocal about the LME warehousing issue?

Today we are sourcing about 3 million tonnes

of primary and recycled aluminum.

We are the world’s largest buyer of aluminum.

How did the warehousing situation develop?

5

$3300 to

$1300/t 20% decline in global consumption

Issue of Over-Supply

Consumption

Production

Australia

W. Europe

N. America

L. America

Africa

Asia China

E. Europe/CIS

7

Oswego, New York2 New Automotive

Finishing Lines

Detroit, MI

LME had rules which required the warehouse to ship a minimum of 1,500 tonnes per dayDetroit Stock Depletion and Revenue Jan/2012

8

Problem Number One: Inflated Premiums

Rise in MWP from 7c/lb to over 12 c/lb

9

Problem Number Two: Supply Chain Risk

September 2011 Wait Time: 5 months

June 2013 Wait Time: 19 months

10

Consumers over paying for metal by $3 billion per year

“[Al Producers] Are Beneficiaries of Warehouse Logjam”October 24, 2013

11

What are the potential solutions?

Aluminum Users Group

There should be no queue.

There should be no queue.

12

“You consumers should be careful what you wish 

for…”-Former Senior LME Executive

blog.novelis.com

13

Competition from warehouse incentives was a significant driver of premium escalation

LME warehouses should not charge rent once a warrant is cancelled

There should be no queues