ab 16 January 2026 Global Research Sector Keys Copper Crunch - the Bull Market accelerates Equities Global Basic Materials Myles Allsop Analyst myles.allsop@ubs.com +44-20-7568 1693 Daniel Major Ethan Hong Associate Analyst ethan.hong@ubs.com +1-212-649 8258 UK Takeover Panel Disclosure: Analyst daniel.major@ubs.com +44-20-7568 3472 Amy Yi Li Analyst amy-yi.li@ubs.com +44-20-7568 2064 George Eadie Analyst george.eadie@ubs.com +1-646-996 4596 Alex Stansbury, CFA Associate Analyst alex.stansbury@ubs.com +1-21 ...

Core Insights - The global aluminum recycling market is projected to reach $91.3 billion by 2032, growing from $57.2 billion in 2024 at a CAGR of 6.2% as industrial consumers seek low-carbon materials to address rising energy costs and decarbonization goals [1] Industry Trends - The energy-saving advantage of secondary aluminum is significant, requiring approximately 95% less energy than primary smelting, which enhances the economic incentive for recycling amid high primary aluminum prices [2] - Persistently high electricity and natural gas prices in Europe have adversely affected the operating rates of primary smelters, making recycled metal a strategic cost-saving option [3] Company Initiatives - Major global producers are investing heavily in expanding recycling capacity, with Novelis Inc. committing around $90 million to double its used beverage can processing capacity in the UK, which will reduce CO2e emissions by over 350,000 tonnes annually [4] - Novelis aims to achieve an average of 75% recycled content across its products by 2030, up from 63% in fiscal year 2024, and is also expanding its recycling capabilities in North America and Asia [5] Market Demand - The transportation industry, especially the electric vehicle segment, is driving demand for recycled aluminum, with automakers focusing on lightweighting to enhance EV range and performance, leading to increased aluminum content in vehicles [6]

Core Insights - Hydro is executing its 2030 strategy effectively, achieving strong results despite market uncertainties, with a focus on green transition opportunities and investments in electric infrastructure [1][3][4] Strategic Direction - In 2023, Hydro launched its strategy to lead the green aluminium transition, emphasizing renewable energy as a critical component in navigating complex market conditions [3][4] - The company aims to consolidate its Extrusions operations by closing five European plants to enhance competitiveness, with a restructuring cost of NOK 1.9 billion and expected annual savings of NOK 0.5 billion from 2027 [4][8] Financial Flexibility and Cost Management - Hydro is implementing a strategic workforce and cost reduction program, targeting a reduction of approximately 750 white-collar positions, with expected annual savings of around NOK 1 billion from 2026 [5][8] - A new NOK 6.5 billion improvement program was launched in 2024 to enhance resilience and accelerate value creation, with NOK 1.2 billion in improvements anticipated for 2025, exceeding the initial target [6][8] Capital Allocation - Capital allocation targets for 2025 and 2026 have been reduced to NOK 13.5 billion from NOK 15 billion, with the removal of additional annual flexibility of NOK 1–2 billion [7][8] - The 2030 EBITDA target for Extrusions has been revised down from NOK 10-12 billion to NOK 8-10 billion due to market conditions and reduced capital allocation [8] Recycling and Extrusions Growth - Hydro is strengthening its position in Recycling, with a target of reaching 850 kt of post-consumer scrap capacity by the end of 2025, contributing to its decarbonization goals [10][11] - The adjusted 2030 earnings target for Recycling has been lowered to NOK 5–6 billion, reflecting current market conditions [11][12] Renewable Power Investments - Hydro approved its largest hydropower investment in over two decades, the Illvatn pumped storage project, costing NOK 2.5 billion and expected to add 48 MW of capacity [14] - The company has secured long-term renewable power agreements totaling approximately 4.16 TWh, enhancing its power portfolio [15] Decarbonization Efforts - Hydro is on track to achieve a 15 percent CO2 reduction by the end of 2025, surpassing its initial 10 percent target [16] - The company aims to halve non-GHG emissions by 2030 and is enhancing transparency through various initiatives [17] Community Engagement and Education - Hydro supports over 300 community projects and is progressing towards its goal of educating 500,000 people by 2030, having already reached 250,000 [18][19] Financial Performance - Hydro's adjusted EBITDA for Q4 2024 to Q3 2025 was NOK 31 billion, an increase from NOK 22.4 billion in 2024, with a robust adjusted RoaCE of 13.5 percent over the past five years [22] - The company expects stable net operating capital, with guidance set at NOK 30 billion for year-end 2025 and 2026 [23]

Aluminum maker Hydro said there are signs that demand in North America for so-called extrusion products is set to strengthen https://t.co/9NOxd6bnif ...

Core Viewpoint - Hydro is initiating a process to cut annual costs by NOK 1 billion, which includes reducing its workforce by 750 positions to strengthen long-term resilience and adapt to changing business requirements [1][2]. Cost Reduction Measures - The company plans to reduce its capital expenditure estimate for 2025 from NOK 15 billion to NOK 13.5 billion as part of its improvement program [2]. - The cost-cutting measures will include reducing travel and consultancy costs, alongside workforce adjustments [1][2]. Workforce Adjustments - Hydro will reduce approximately 750 white-collar positions, with 600 full-time equivalents (FTEs) expected to be cut by the end of 2025 and an additional 150 to be identified through efficiency initiatives from 2026 onwards [3][5]. - The workforce adjustments will primarily affect white-collar roles, including staff and support functions, engineering, commercial, supply chain, and IT, while blue-collar positions will remain unaffected [5]. Commitment to Transparency - The company is committed to conducting the transition with transparency and care, ensuring collaboration with employee representatives throughout the process [4][6]. - Hydro's approach is guided by its values of care, courage, and collaboration [4]. Long-term Value Delivery - By implementing these measures, Hydro aims to enhance its ability to navigate uncertainty and continue delivering long-term value to customers, employees, and stakeholders [6].

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Aluminium and Alumina - **Geographical Focus**: Indonesia, China, India, and global markets Aluminium Market Insights - **Supply and Demand Outlook**: - Primary aluminium demand growth is expected to be around 2.5% for 2024/25, slightly below the trend of 3-4% [2] - Supply growth is anticipated to match demand, leading to a modest surplus in the global aluminium market [2] - Limited supply growth is expected due to China smelter run rates being at the 45 million tonnes (mt) cap, with potential projects in Indonesia, India, Middle East, and Africa contributing modestly over the next 2-3 years [2][8] - The LME price is above the cost curve, indicating an improving supply and demand outlook [2] - **Investment Recommendations**: - Preferred stocks for aluminium exposure include Hydro and Press Metal (BUY) while Alcoa and S32 are rated Neutral [1] - **Medium-Term Price Risks**: - Limited scope for the industry to quickly lift supply when demand improves, resulting in tighter markets and medium-term price risks skewed to the upside [2] Alumina Market Insights - **Price Trends**: - After a sharp decline in the first half of 2025, alumina prices have bounced back, trading between $370-380 per tonne [3][41] - Prices are expected to remain anchored to the cost curve due to significant overcapacity in China and additional supply from Indonesia and India [3][41] - **Supply Outlook**: - China is expected to add 7-10 million tonnes of new capacity in 2025, contributing to overcapacity [3] - Approximately 6 million tonnes of projects are ramping up in Indonesia, with an additional 2.5 million tonnes in India [3][35] Indonesia's Role in Aluminium Supply - **Capacity Additions**: - Indonesia is expected to be a significant contributor to global supply growth, with 2.2 million tonnes of new aluminium supply projected over the next 3-4 years [10][22] - Current projects in Indonesia are constrained by insufficient land and power, limiting overwhelming growth in supply [10][15] - **Power Constraints**: - Aluminium smelting is power-intensive, requiring approximately 15 terawatt-hours (TWh) of power for 1 million tonnes of capacity [11][13] - The planned 2.2 million tonnes of aluminium smelters would consume about 40% of the power currently used by the nickel industry, necessitating a 10% growth in national power output over 3-4 years [13] Risks and Considerations - **Alumina Supply Risks**: - The combination of additional supply from Indonesia and overcapacity in China is likely to limit sustainable upside in alumina prices [3][41] - Potential disruptions in bauxite supply from Guinea could create upside risks for alumina prices, but sustained tightness is not the central case [34] - **Market Dynamics**: - The aluminium market is closely monitoring the evolution of Indonesia's industrial parks and smelter project pipeline, with measured growth in aluminium supply expected rather than overwhelming growth [15] Conclusion - The aluminium market is characterized by limited supply growth and a positive fundamental outlook, while the alumina market faces challenges from overcapacity and price volatility. Indonesia's role as a growing supplier is significant, but power constraints and project development challenges may temper expectations for rapid supply increases.

Core Insights - Telenor Group reported strong second-quarter results for 2025, leading to an increased EBITDA outlook for both the Nordics and the Group overall [1][3] - The company is enhancing its position in the Nordic fibre market with significant investments, including a NOK 1.4 billion investment in Finland and a NOK 6 billion acquisition of GlobalConnect's consumer business in Norway [1][8] Financial Performance - Telenor achieved a year-over-year organic growth of 2.9% in service revenues and 8.3% in EBITDA during the second quarter [2] - The Nordic segment was the primary driver, with an impressive 12.5% organic growth in adjusted EBITDA [2] - For the first half of 2025, adjusted EBITDA reached NOK 18.0 billion, with free cash flow before M&A at NOK 4.6 billion [3] Regional Highlights - In the Nordics, Telenor experienced a 3.7% organic growth in service revenues [4] - Telenor Norway outperformed expectations with a 3.7% growth in service revenues and a 16.1% increase in adjusted EBITDA [5] - Telenor Pakistan reported a robust 15.0% growth in service revenues, while Grameenphone maintained good performance despite market challenges in Bangladesh [6] Strategic Investments - Telenor plans to upgrade DNA's broadband infrastructure to an all-fibre network in Finland by 2028, with an investment of approximately NOK 1.4 billion [7] - The acquisition of GlobalConnect's consumer business, valued at NOK 6 billion, includes fibre infrastructure and around 140,000 fibre customers [8] - These investments are expected to create synergies and enhance customer experiences across the telecom market [9] Future Outlook - The Nordic business anticipates mid-single-digit organic growth in EBITDA, with capex expected to account for around 14% of revenues [15] - Free cash flow before M&A is projected to be around NOK 13 billion [15]

Group 1: Report Information - Report Type: Aluminum Daily Report [1] - Date: May 21, 2025 [2] - Research Team: Non - ferrous Metals Research Team [3] - Researchers: Yu Feifei, Zhang Ping, Peng Jinglin [3] Group 2: Investment Rating - No investment rating information provided Group 3: Core View - On the 20th, Shanghai Aluminum continued its downward trend approaching the 20,000 mark, with the main 2507 contract reaching a minimum of 20,005 and closing at 20,075, down 0.45%. The total index position decreased by 5,569 to 515,961 lots. Spot market transactions in East China and Gongyi were average. Alumina is running strongly in the short - term due to supply concerns, but the medium - term surplus trend remains. For electrolytic aluminum, supply pressure is limited, while demand may decline in the off - season. Enterprises can lock in profits at high prices [9] Group 4: Market Review and Operation Suggestions - **Market Performance**: Shanghai Aluminum continued to fall on the 20th, with the main contract closing down 0.45%. The total index position decreased. Spot market had different performances in different regions, and the spot import loss narrowed [9] - **Alumina Situation**: It is running strongly in the short - term due to the suspension notice of a mining area in Guinea, but the medium - term surplus trend remains, and there are opportunities for high - level hedging [9] - **Electrolytic Aluminum Situation**: Supply pressure is limited due to capacity ceiling and insufficient hydropower recovery in Yunnan. Demand may decline in the off - season, and inventory may be affected [9] - **Operation Suggestion**: Enterprises can lock in profits at high prices considering the approaching off - season and high smelting profits [9] Group 5: Industry News - **Trade Agreement**: On May 8, 2025, the US and the UK reached a bilateral trade agreement. The US will cancel the 25% tariff on UK steel and aluminum and reduce the import tax rate on UK cars from 27.5% to 10% for the first 100,000 cars per year. In return, the UK will cancel the import tariff on US ethanol and open the beef market [10] - **Corporate Cooperation**: Norwegian aluminum giant Hydro and global aluminum die - casting manufacturer Nemak will cooperate to develop decarbonized cast aluminum products for the automotive industry. They aim to increase the proportion of recycled aluminum and shift to cleaner energy to reduce the carbon footprint [11] - **Mining License**: Guinea plans to revoke the mining license of UAE's EGA. EGA's export and mining activities have been suspended since October 2024, and the affected mining area has an estimated reserve of about 400 million tons of bauxite [11]

Group 1: Report Information - Report Date: May 20, 2025 [2] - Report Type: Aluminum Daily Report [1] - Research Team: Non - ferrous Metals Research Team [3] - Researchers: Yu Feifei, Zhang Ping, Peng Jinglin [3] Group 2: Investment Rating - No investment rating information provided Group 3: Core View - On May 19, Shanghai aluminum rose and then fell, closing slightly down 0.2% at 20,110. The total open interest of the index decreased by 14,465 to 521,530 lots. The spot import loss remained at around - 1,300 yuan/ton. Alumina prices rose sharply due to concerns about bauxite supply, but the substantial impact is limited. In the short - term, it is considered strong under the impetus of sentiment and funds, while the medium - term surplus trend remains unchanged. Enterprises can wait for high - level hedging opportunities. For electrolytic aluminum, supply pressure is limited due to capacity ceiling restrictions and insufficient recovery of Yunnan's hydropower. On the demand side, inventory slightly accumulated on Monday, and the approaching off - season may lead to a decline in demand and affect inventory performance. Overall, the relaxed macro - atmosphere and continuous unexpected inventory drawdown support the strong performance of aluminum prices, but the increase in absolute prices has inhibited downstream consumption, and enterprises can still lock in smelting profits at high prices [8] Group 4: Market Review and Operation Suggestions - **Aluminum Market Performance**: On May 19, Shanghai aluminum reached a high of 20,300 during the session but then declined, closing slightly down 0.2% at 20,110. The total open interest of the index decreased by 14,465 to 521,530 lots, and the spot import loss remained at around - 1,300 yuan/ton [8] - **Alumina Market**: Alumina prices rose sharply, with many far - month contracts closing at the daily limit. The main reason is the suspension notice for a mining area in Guinea, which has raised concerns about bauxite supply. The short - term is strong under sentiment and funds, but the medium - term surplus trend remains unchanged, and enterprises can wait for high - level hedging opportunities [8] - **Electrolytic Aluminum**: Supply pressure is limited due to capacity ceiling restrictions and insufficient recovery of Yunnan's hydropower. On the demand side, inventory slightly accumulated on Monday, and the approaching off - season may lead to a decline in demand and affect inventory performance. Enterprises can lock in smelting profits at high prices [8] Group 5: Industry News - **US - UK Trade Agreement**: On May 8, 2025, the US and the UK reached a bilateral trade agreement. The US will cancel the 25% tariff on UK steel and aluminum products and reduce the import tariff on UK cars from 27.5% to 10% for the first 100,000 cars per year. In return, the UK will cancel the import tariff on US ethanol and open the beef market. The US still maintains a 10% benchmark tariff on most UK goods [9] - **Hydro - Nemak Cooperation**: Norwegian aluminum giant Hydro and global aluminum die - casting manufacturer Nemak will cooperate to develop decarbonized cast aluminum products for the automotive industry. They have signed a letter of intent to increase the proportion of recycled aluminum at Hydro's Brazilian refinery and shift to cleaner energy sources to reduce the carbon footprint of aluminum castings. Hydro's primary casting aluminum alloy already has a low carbon footprint, and they aim to further reduce it by 25% [10] - **Guinea's Mining License Revocation**: Guinea is planning to revoke the mining license of Emirates Global Aluminium. Since October 2024, the export and mining activities of its subsidiary in Guinea have been suspended. The mining area covers 690 square kilometers with an estimated bauxite reserve of 400 million tons. This reflects the trend of resource - rich countries strengthening control over minerals [10]

Group 1: Report Overview - Report Name: Aluminum Daily Report [1] - Date: May 14, 2025 [2] - Research Team: Nonferrous Metals Research Team [3] Group 2: Market Review and Operational Suggestions - Aluminum Price: The aluminum price continued to rise and reached the 20,000 mark, with the main contract closing at 20,005, up 1.27%. The total open interest of the index decreased by 1,891 to 547,335 lots [8] - Spot Market: After the absolute price increase, the premium/discount was under pressure. The spot import loss was around -1,300 yuan/ton [8] - Alumina: It oscillated narrowly at a high level. The overall operating capacity reduction was not obvious, and the oversupply trend was hard to change. It was recommended to short on rebounds [8] - Electrolytic Aluminum: In May, the domestic operating capacity remained at a high level. The small - scale and rotating maintenance had little impact on supply. The overall supply pressure was limited. The demand was expected to be dragged down by the seasonal decline in the traditional off - season and the end of the photovoltaic rush to install [8] - Market Outlook: After the aluminum price rebounded, the smelting profit climbed to a high level in the nonferrous sector, which might lead to insufficient long - buying power. Short - hedging could participate on rallies [8] Group 3: Industry News - Trade Agreement: On May 8, 2025, the US and the UK reached a bilateral trade agreement. The US will cancel the 25% tariff on UK steel and aluminum products and reduce the import tariff on UK cars from 27.5% to 10% for the first 100,000 cars per year [9] - Corporate Cooperation: Hydro and Nemak will cooperate to develop decarbonized cast aluminum products for the automotive industry. They aim to increase the proportion of recycled aluminum and shift to cleaner energy to reduce the carbon footprint [10] - Mining License: Guinea plans to revoke the mining license of EGA. Since October 2024, GAC's export and mining activities have been suspended [10]