CHELYABINSK ZINC PLANT Credit Suisse 28 Global Steel and Mining Conference London, UK
Disclaimer This Presentation (the Presentation ) of JSC Chelyabinsk Zinc Plant (the Company ) has been prepared solely for informational purposes. The information contained herein has been prepared using information available to the Company at the time of preparation of the presentation. External or other factors may have impacted on the business of the Company and the content of this presentation, since its preparation. This document does not constitute or form part of, and should not be construed as, an advertisement for, or an offer, solicitation or invitation to sell or issue, or to subscribe for, underwrite or otherwise acquire the securities of the Company, nor shall any part of it or the fact of its presentation or distribution form part of, or be relied on in connection with, any contract or investment decision or commitment relating thereto, nor does it constitute a recommendation regarding the securities of the Company. Certain statements in this Presentation may constitute forward-looking statements. Such statements, which usually contain the words anticipate, believe, intend, estimate, expect and words of similar meaning, include matters that are not historical facts or statements and reflect the beliefs, intentions or current expectations of the Company regarding, inter alia, the Company s (i) goals and strategies, (ii) plans for new product development, (iii) marketing plans and target markets, (iv) evaluation of its markets, competition and competitive position, and (v) trends which may be expressed or implied by financial or other information or statements contained herein. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance and outcomes to be materially different from any future results, performance or outcomes expressed or implied by such forward-looking statements. Even if the actual results are consistent with the forward-looking statements contained in this Presentation, those results may not be indicative of results or developments in future periods. The Company does not undertake any obligation to update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this Presentation. Neither the receipt of this Presentation by any person, nor any information contained herein constitutes, or shall be relied upon as constituting, any advice relating to the future performance of the Company. Credit Suisse 28 Global Steel and Mining Conference Slide 2
Agenda! World & Russian zinc market overview and outlook Credit Suisse 28 Global Steel and Mining Conference Slide 3
Zinc daily prices and stock levels (LME) 5 4 5 4 3 5 3 Inventory (right scale), (tonnes) Cash price (left scale), ($/tonne) 8 7 6 5 2 5 4 2 1 5 1 5 3 2 1 Jan-2 Jul-2 Dec-2 Jun-3 Dec-3 Jun-4 Dec-4 Jun-5 Dec-5 Jun-6 Dec-6 Jun-7 Dec-7 Jun-8 Source: London Metal Exchange Credit Suisse 28 Global Steel and Mining Conference Slide 4
Chinese zinc trade ooo tonnes 6 EXPORTS 4 Concentrates Metal 2-2 -4-6 -8-1 Source: ILZSG 2 21 22 23 24 25 26 27 28F IMPORTS Credit Suisse 28 Global Steel and Mining Conference Slide 5
The price cycle TREATMENT CHARGE Surplus concentrate and refined stocks. Low prices force mine production cuts Mine production outstrips smelter demand; smelter production outstrips consumer demand. Markets move to surplus. Price trends lower. TCs trend higher PRICE Constrained concentrate supply forces smelter production cuts. Refined stocks fall, prices increase Mine production reactivated and new mines under development. Concentrate and refined stocks low. Prices approach cyclical highs and TCs improve Source: Brook Hunt Credit Suisse 28 Global Steel and Mining Conference Slide 6
Zinc world balance ooo tonnes 4 3 2 1-1 -2-3 -4 2 21 22 23 24 25 26 27 28F Source: ILZSG Credit Suisse 28 Global Steel and Mining Conference Slide 7
Russian zinc production and consumption ooo tonnes 3 Production Consumption 25 2 15 1 5 2 21 22 23 24 25 26 27 28E Credit Suisse 28 Global Steel and Mining Conference Slide 8
Russian zinc market structure (2) Alloys 18% Other 6% Galvanized steel 62% (1) Chemicals 14% (1) Includes 1% of galvanized steel produced using dipping method (2) Includes Brass Credit Suisse 28 Global Steel and Mining Conference Slide 9
Growth in galvanizing steel capacity ooo tonnes 4 5 4 CAGR 26-9F =7.% 3 5 3 2 5 2 1 5 1 5 22 23 24 25 26 27 28F 29F Novolipesk Severstal Magitogorsk Other Russian producers Source: metalinfo.ru Credit Suisse 28 Global Steel and Mining Conference Slide 1
Russian car market ooo units 4 3 5 CAGR 26-15F =7.2% 3 2 5 2 1 5 1 5 22 23 24 25 26 27 215F Russian producers Imports JVs in Russia & CIS Source: GTK, Goskomstat, Company data, Deutsche Bank estimates Credit Suisse 28 Global Steel and Mining Conference Slide 11
Construction growth (million of sq m) 8 7 CAGR 24-1F =9% 6 5 4 3 2 1 24 25 26 27 28F 29F 21F Residential Office Retail Warehousing Source: Goskomstat, Deutsche Bank estimates Credit Suisse 28 Global Steel and Mining Conference Slide 12