Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Metal Bulletin Conference (March 2013)
12 slides from Norsk Hydro Asa's conference presentation, Mar 14, 2013
Slide 1: The alumina market outlook – 2013-15
The alumina market outlook – 2013 -15 Simon Storesund, SVP Commercial, B&A Miami, March 14, 2013 (1) , 2012-08-29
Slide 2: Key messages – 2013-2015
Key messages – 2013-2015 Demand • Primary demand 2012-2015 CAGR: ROW 3%, China 8.5%, (World: 5.5%) Bauxite • China to be dependent on Atlantic import • Tightening global bauxite balance Alumina • Expect a balanced market • Potential for tighter market 2014-15, if China is not able to source the baux
Slide 3: Chinese bauxite production not able to grow in line with demand
Chinese bauxite production not able to grow in line with demand kt bauxite ratio 140,000 50% 120,000 45% 100,000 40% 80,000 35% 60,000 30% 40,000 Quality deteriorating over time – driving cost 25% 20,000 - 20% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 domestic production bauxite imports baux
Slide 4: China is facing bauxite supply risks
China is facing bauxite supply risks Potential drastic reduction in export from Indonesia Indonesia • 2014 export ban? • Level of export? • Export tax 50%? Australia • Short-term limited expansion opport. • Environmental issues India • Domestic bauxite issues + export tax Current main export routes
Slide 5: …and must likely expand its horizon in search for bauxite imports
…and must likely expand its horizon in search for bauxite imports Current main export routes Potential imports to China (5)
Slide 6: …which is likely to increase bauxite prices CIF China
…which is likely to increase bauxite prices CIF China 2015 scenario, assumed Indonesia export at 20 mill. tons per year USD/t Avr CIF China 75 55 Higher quality – higher prices 35 2010 2011 2012 2015 Total Chinese imports 100% 75% 7 Mt Gap to be filled by alumina imports? 50% 25% 0% 2012 2015 Indone
Slide 7: ROW alumina demand increase – From 2012 to 2015
ROW alumina demand increase – From 2012 to 2015 Primary demand 2012-2015 CAGR: ROW 3%, China 8.5% kt alumina 8,000 2015 exports 6.5Mtpa 7,000 EMAL Jharsuguda 6,000 Korba Kitimat 5,000 Ma-aden 4,000 Mahan Similajau Level linked to bauxite availability and alumina price 3,000 2,000 1,000 0 Greenfield
Slide 8: ROW alumina supply increase from 2012 to 2015
ROW alumina supply increase from 2012 to 2015 kt alumina 8,000 Lanjigarh Friguia? 7,000 6,000 Yarwun Worsley 5,000 Tan Rai Utkal Anrak 4,000 Ma-aden 3,000 2,000 1,000 0 Greenfield Brownfield Restart Source: CRU, Hydro analysis (8)
Slide 9: Alumina market ex. China expected to be broadly balanced for 2013-2015
Due to Chinese imports, the alumina market in the world ex. China expected to be broadly balanced for 2013-2015 kt alumina 3,000 2,000 1,000 0 2011 2012 2013 2014 2015 -1,000 -2,000 -3,000 Net balance Including restarts/curtailments Source: Hydro analysis (9)
Slide 10: ROW cash cost curve – several refineries cash negative
ROW cash cost curve – several refineries cash negative ROW Business operating cost 2012 In USD/t 500 100% closed down refineries 450 400 350 Platts 300 250 200 150 100 50 Production 0 in mt 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 Source: CRU, Hyd
Slide 11: China: The World's swing producer – stabilizing the market
China: The World’s swing producer – stabilizing the market USD/t Percent USD/t kt/month 500 18% 500 800 import in kt Platts alumina price Alumina price (left axis) % of LME 700 17% 450 1Yrolling avr % 450 600 16% 400 500 400 15% 400 350 350 300 14% 200 300 300 13% 100 250 12% 250 - Aug-10 Aug-11 Aug
Slide 12: Concluding remarks
Concluding remarks Demand • Primary demand 2012-2015 CAGR: ROW 3%, China 8.5% Bauxite • China to increase import from the Atlantic • Tightening global bauxite balance Alumina • Expect a fairly balanced market • Potential for tighter market 2014-15 Key factors to watch • China domestic bx production