NORTH AMERICA POLICY & POLITICS

Transcription

1 MARCH 16, 2016 NORTH AMERICA POLICY & POLITICS AFSA International Aluminium Conference and Exhibition Heidi Brock President & CEO The Aluminum Association

2 U.S. POSITIVE OUTLOOK 5% 4% 4.6% Real Gross Domestic Product 4.3% 3.9% 3% 2% 1% 2.1% 0.6% 2.0% 1.0% 1.5% 2.5% 2.5% 2.0% 0% -1% -2% 2014:I II III IV 2015:I II III IV 2016:I II III IV -0.9% Real GDP Forecast: 2.4% (2014) 2.4% (2015) Source: National Association of Manufacturers 2

3 MANUFACTURING GROWTH Actual and Predicted Production Growth (NAICS, 2012=100) Actual Manufacturing Production Predicted Manufacturing Production Source: National Association of Manufacturers 3

4 STRONG DEMAND North American Demand for Aluminum (Billions of Pounds) Demand up 3.6% Y/Y in 2014 Approaching Mid-2000s record levels YTD Demand up 1.0% Apparent Consumption up 4.7% YTD Aluminum Association 4

5 HEALTHIER MARKETS TODAY Building & Construction up 7% Y/Y 19% since 2009 Containers & Packaging up 0.4% Y/Y 4.7% since 2009 Transportation market up 11% Y/Y 95% since 2009 Exports down 6% Y/Y 5

6 SUPPLYING THE METAL North American Aluminum Metal Supply 2014 (Billions of LBs) Primary* Secondary Imports Inventories Total Aluminum Association, U.S. Census Bureau, USGS, LME *Includes additives and melt loss 6

7 PRIMARY & SECONDARY 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 Total North America Primary Production (Annual Rate in Thousands of Metric Tons) Canada U.S U.S. Primary & Secondary Production (Millions of pounds) Secondary Primary 1, Aluminum Assoc. & Aluminum Assoc. of Canada Not Seasonally Adjusted Aluminum Association; U.S. Geological Survey Not Seasonally Adjusted 7

8 GROWTH IN CHINESE IMPORTS U.S. Imports of Chinese Semifabricated Products (Million Lbs) 1,400 Extrusions Sheet & Plate Foil All Other 1,200 1, U.S. Census Bureau 8

9 TRANSSHIPMENTS 9

10 HIGHEST EMISSIONS IN THE WORLD Average CO2 emission by region, 2014 Share of total CO2 emissions from smelting, 2014 Metric tons of CO2 per metric ton of aluminum produced Africa Central and South America Europe 3% 1% CIS* 3% % Australasia 4% North America Asia Australasia Africa Middle East North America 6% Middle East 7% China Asia 5% CIS* Europe 68% China Central and South America 10 Source: CRU, CIS refers to Russia and former Soviet Republics

11 APPEALING TO U.S. GOVERNMENT 60,000 50,000 40,000 30,000 20,000 Chinese Overcapacity China U.S.-China Bilateral Negotiations June: Strategic and Economic Dialogue in Beijing September: G20 Summit in China 10,000 Rest of World Trading Systems and Enforcement November: JCCT in U.S. 2,500 2,400 Data and Analysis 2,300 2,200 2,100 2,000 1,900 1,800 1,700 1,

12 SHORT & LONG TERM APPROACHES Curb Chinese Oversupply 1) Align supply with demand 2) Increase data transparency 3) Enforce EH&S standards 4) Cut emissions 5) Maintain 15% export duty, remove VAT Responsible Integration China will remain significant player Cost-effective smelting technology Growing demand for aluminum Support China to meet its objectives EH&S, trade principles Opportunity in value-added production 12

13 JOIN THE CONVERSATION 14

14 MARCH 17, 2016 THE AUTO OPPORTUNITY: NORTH AMERICAN MARKET TRENDS AFSA International Aluminium Conference and Exhibition Heidi Brock President & CEO The Aluminum Association

15 50 YEARS OF GROWTH 600 DOORS & BODY-IN- WHITE BLOCKS 500 lbs. Pounds Per Vehicle (PPV) HOODS WHEELS 300 BUMPERS 394 lbs. HEADS 200 Sheet Extrusions HEAT EXCHANGERS Source: 2015, Ducker Worldwide 2

16 KEY TAKEAWAYS: DUCKER SURVEY 2015: Highest growth year First high-volume automotive body and structure (F-150 pickup) Sheet and extrusions body, closures By 2020: Every OEM will have more than one aluminum-intensive body and multiple aluminum-intensive closure programs. Source: 2015, Ducker Worldwide 3

17 ALUMINUM-INTENSIVE VEHICLES TODAY Body-in-White & Closures Ford Audi A8 F-150 Jaguar F-Pace Jaguar Tesla XF Land Rover Model S Range Rover 4

18 MULTI-MATERIAL VEHICLES The New Normal Cadillac BMW Chrysler BMW Pacifica CT6 Mercedes-Benz BMW S-Class 7-Series Chevrolet i3 Malibu 5

19 THE FORD F-150 EXPERIENCE Weight Reduction: 700 pounds, 12% decrease in curb weight Fuel Economy: Already meeting 2024 EPA standards; best fuel economy for full-size, gas pickup Safety: 5-star safety rating; improvement in every category over 2014 steel model Sources: Ford Motor Company; EPA; NHTSA; Motley Fool; Detroit Free Press 6

20 MEETING THE DEMAND $2.7 billion in capital announced or invested in U.S. since Fall 2013 Oct Tri-Arrows/Logan $240M Expansion in Russellville, KY Oct Constellium $750M Expansion in Muscle Shoals, AL Sept Aleris $350M Expansion in Lewisport, KY Jul Constellium/Tri-Arrows $150M New JV Plant in Bowling Green, KY 2013 > 2015 Alcoa $890M in Expansions in Davenport, IA; Alcoa, TN & La Porte, IN (incl. aerospace) 2013 > 2016 Novelis $300M in Expansions in Oswego, NY 7

21 MEETING CUSTOMER NEEDS Continuous Improvement o High Strength o Energy Absorption o Advanced Formability o Manufacturing o Sustainability Source: Alcoa, Inc. 8

22 CONTINUING TO INNOVATE Commercially Pure Aluminum 1xxx Series Heat-Treatable Alloys 2xxx Series 6xxx Series 7xxx Series Non Heat-Treatable Alloys 3xxx Series 4xxx Series 5xxx Series Source: The Aluminum Association 9

23 HIGH VOLUME JOINING SOLUTIONS Chapters Introduction to Joining Fusion welding Arc welding Beam welding Resistance welding Brazing Solid state welding Mechanical joining Adhesive joining Hybrid joining techniques Joining of dissimilar materials Source: Aluminum Transportation Group 10

24 FUEL ECONOMY MIDCOURSE REVIEW 2011: Federal government agreement with 13 major U.S. automakers to increase fleetwide vehicle fuel economy to 54.5 mpg by 2025 Part of agreement was midterm evaluation of rule in 2017 Process begins in 2016 Regulators could reduce, maintain or increase agreed-to standard Standard essential to continued penetration of auto aluminum Source: EPA 11

25 ALUMINUM TOP PICK TO MEET STANDARDS 2015 Dupont/WardsAuto Survey 900 automotive company engineers Aluminum favored among designers and engineers to help meet 2025 fuel economy and emissions targets Source: 2015, Dupont/Wards Auto 12

26 ENVIRONMENTAL SUPERIORITY US DOE Oak Ridge National Lab Study Aluminum-intensive vehicles offer lowest life cycle energy ( 20%) and CO 2 impact ( 17%) vs. modern steel vehicles Use phase contributes over 90% of life cycle impacts Steel vehicle s higher use phase energy and CO 2 cancels out production phase Source: 2014, Oak Ridge National Laboratory 13

27 TELLING THE STORY Source: The Aluminum Association 14

28 JOIN THE CONVERSATION 15