Alexey Alipchenko, Trimet Group, Russia The aluminum alloys industry in Russia: the situation today and post WTO entry.
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Aluminum Recycling in post- Soviet countries in 2011. in MT 514 000 34,000 21,500 20,000 19400 Russia Ukraine Кazakhstan Belorussia Baltic Countries 14.09.2012 TRIMET ALUMINIUM AG 3
Structure of Aluminum alloys consumption in Russian Federation in 2011. others 2% steel industry 33% Automotive industry 39% gas industry 3% food industry 6% engineering industry 12% building industry 4% electrical industry 1% Data according to Federal State Statistic Committee of Russia (ROSSTAT) 14.09.2012 TRIMET ALUMINIUM AG 4
Structure of Aluminum alloys consumption in Russian Federation in 2011. others 2% Recycling industry s share of Alu alloy s consumption in Russia in 2011: steel industry 33% gas industry food industry 3% 6% building industry 4% electrical industry 1% engineering industry 12% Automotive industry 39% - Die casting alloys 50 000 mt - Extrusion items 40 000 mt - De- oxidizers (ingots/pyramids) 50 000 mt - De- oxidizers (wire rod) 12 000 mt - Powder items 30 000 mt Total about 182 000 mt 14.09.2012 TRIMET ALUMINIUM AG 5
Aluminum Recycling in CIS Кazakhstan Belorussia Ukraine Russia 14.09.2012 TRIMET ALUMINIUM AG 6
Structure of recycled aluminum alloys production in Russia in 2011 Base Alloy (AK5M2) 40 000 MT 48 000 (8%) mt (9%) Die-casting Alloys (AK12M2/DIN 226/ADC12 or similar) 80 400 mt (16%) 86 200 mt (17%) 259 700 mt (50%) De-oxidisers Rolling and extrusion alloys Alu powder and other purpose 14.09.2012 TRIMET ALUMINIUM AG 7
Definitions 14.09.2012 TRIMET ALUMINIUM AG 8
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Retrospective comparative data of export volumes ex- Russia. in MT 1990 2000 2004 2005 2006 2007 2008 2009 2010 2011 14.09.2012 TRIMET ALUMINIUM AG 10
Comparative data of export vs. domestic consumption in Russia. 1990 2000 2011 Export 291 076 mt vs. Domestic 180 000 mt 2005 2006 2007 2008 1990 2004 2009 2010 2011 2000 2004 2006 2007 2008 2005 2009 2010 2011 export domestic 14.09.2012 TRIMET ALUMINIUM AG 11
Russia s downstream segment where is investment needed? Russia others 2% steel industry 33% Automotive industry 39% gas industry 3% food industry 6% engineering industry 12% building industry 4% electrical industry 1% building industry 4% steel industry 3% electrical industry 2% food industry 2% others 2% Western world engineering industry 12% Automotive industry 75% 14.09.2012 TRIMET ALUMINIUM AG 12
OEM & SKD in Russia. Good perspectives for secondary producers. 14.09.2012 TRIMET ALUMINIUM AG 13
Localization of car production. In connection with the development in Russia of assembling productions of foreign brands- there is a growing demand in the local parts and details. According to CEO of Bosch Russia Ltd. volume of sales of Bosch group products has increased as per results of 2011 for 50% and exceeded one billion EURO. Today in Russia 12 motor& power-train plants. Their number to be increased by foreign brands. Volkswagen group is candidate number one. 14.09.2012 TRIMET ALUMINIUM AG 14
What in 2012? 14.09.2012 TRIMET ALUMINIUM AG 15
The aluminum alloys industry in Russia: the situation today and post WTO entry. Officially Russia joined WTO on 22 August 2012. Russia s today non- ferrous scrap export tax 50%. Export tax to be reduced. There is a transitional period is for 5 years, starts 2013. The changes will include: first year - 50% tax second year - 40% tax third year - 30% tax fourth year 20% tax fifth year 10% tax, but not less than 76 Euro per MT This final rate for all subsequent years. 14.09.2012 TRIMET ALUMINIUM AG 16
The aluminum alloys industry in Russia: the situation today and post WTO entry. Cu Copper scrap within 5 years will come to 10%, but not less than 84 Euro per MT Pb Lead scrap within 5 years will come to 10%, but not less than 35 Euro per MT Zn Zinc scrap within 5 years will come to 10%, but not less than 60 Euro per MT 14.09.2012 TRIMET ALUMINIUM AG 17
The aluminum alloys industry in Russia: the situation today and post WTO entry. Possible consequences and scenario counter possible threats. - 10 %(76 Euro/mt Min.) is a level at which level from which the export of scrap is quite possible. - Competition for scrap between export and local smelters will arise and will lead to price grow. - In five year period domestic consumption will not grow over 50% of Russia s production and domestic consumption will not be able to dictate prices for scrap. As a result shortage of scrap for local production. Is necessary: - For State: to monitor compliance with the terms of localization automakers and where possible - to encourage the acceleration of the process of localization. - For Producers: to encourage the consumption of existing die- casters, by improving the quality of service and products (alloys). to seek an alliance with the automakers to create a reliable supply- chain for future motor-plants in Russia. 14.09.2012 TRIMET ALUMINIUM AG 18
Thank you very much for your attention! Vrubelya 8-178, Moscow, Russian Federation 125080 Tel.: +7-901-541-58-10 aalipchenko@trimetag.ch 14.09.2012 TRIMET ALUMINIUM AG 19