Summary of Key Points from the Conference Call Industry Overview - The focus is on the **aluminium and nickel industries**, particularly in the context of **Indonesia's power allocation** and its implications for supply and pricing dynamics. Core Insights and Arguments 1. **Power Reallocation Risks**: There is a potential risk that Indonesia may prioritize power supply from nickel to aluminium, which could negatively impact aluminium pricing while benefiting nickel. However, this scenario is deemed unlikely to occur on a significant scale [1][3][7]. 2. **Aluminium Demand vs. Power Capacity**: To meet global aluminium demand growth over the next five years, Indonesia would need to increase its coal-fired power capacity fivefold compared to the past decade's nickel expansion, which is a challenging target [2][24]. 3. **Cost Implications for Aluminium Smelters**: If regional power prices align with data center willingness-to-pay (WTP) levels, aluminium smelters could face significantly higher cash costs, estimated to rise by approximately $1,280 per ton, leading to a new cash cost range of $2,600 to $2,950 per ton [4][29][30]. 4. **Nickel Industry Resilience**: Despite current pressures on nickel prices, the overall nickel value chain remains profitable, limiting the incentive for large-scale reductions in nickel production. The integrated nature of the China-Indonesia industrial corridor further complicates any potential rationalization of nickel operations [3][15][21]. 5. **Power Release Limitations**: Any potential power released from nickel operations due to rationalization would be limited and gradual, making it insufficient to support a large-scale aluminium build-out [8][15]. 6. **Embedded Value Chains**: The interconnectedness of Indonesia's nickel industry with Chinese stainless and battery-materials producers means that large-scale shutdowns would disrupt raw material flows and undermine existing investments [21][22]. Additional Important Insights 1. **Long-term Power Contracts**: Regions with long-term power purchase agreements (PPAs) tend to be more insulated from market-driven power price fluctuations, which could delay the impact of rising power costs on aluminium smelting operations [4][33]. 2. **Market Dynamics**: The aluminium and nickel markets are influenced by various factors, including local power market designs, regulatory constraints, and the economic viability of mining operations, which can affect overall supply and pricing strategies [4][14][32]. 3. **Future Projections**: The historical context of Indonesia's rapid rise in nickel output suggests that replicating this success in aluminium will require substantial new infrastructure and investment, which may not be feasible in the short term [22][24]. This summary encapsulates the critical points discussed in the conference call, highlighting the complexities and interdependencies within the aluminium and nickel markets, particularly in the context of Indonesia's evolving industrial landscape.