Slide 1

Finance & Investment Club Materials Sector Fall 2014 Senior Analyst: Joo Sung Kim Junior Analysts: TBD Aluminum Manufacturing

Slide 2

Aluminum Industry Companies in this industry manufacture aluminum and aluminum products from either original or recycled material Products are used in vehicle frames, residential construction and medical equipment. Successful companies are those that manage to achieve highest economies of scale through size, or technical superiority through advanced furnace technology. Century Aluminum NASDAQ: CENX Kaiser Aluminum NASDAQ: KALU Constellium Aluminum NYSE: CSTM Reliance Steel NYSE: RS Alumina Limited OTC: AWCMY Alcoa Aluminum NYSE: AA

Slide 3

Industry Breakdown Materials Sector ($2,000B) Metals and Mining ($674.02B) = 33.70% Aluminum ($107B) = 15.87%

Slide 4

Industry Summary

Slide 5

Business Model: Aluminum Manufacturing Industry Raw Material Sourcing Smelting Product Diversificatio n Sales to Customers Recycling

Slide 6

Growth in Demand Industries Stable Aluminum Price Improving Domestic Competition Trends

Slide 7

Growth of Demand Industries Source: IBISWorld Automobile Manufacturing industry 4.97% CAGR 10-14 0.67% CAGR 15-19 Metal Can Manufacturing industry 0.76% CAGR 10- 14 0.53% CAGR 15- 19 Stable or increasing growth from demand industries positive forecast for aluminum industry Predictable revenue for aluminum industry CAGR 4.97% CAGR 0.67% CAGR 0.76% CAGR 0.53%

Slide 8

Stable Aluminum Price Total number of active plants fell by CAGR 1.5% in 2010-2014 Number of active plants forecasted increase by CAGR 0.71% for 2014- 2018 Fall of aluminum price near slowdown/recovery LME Benchmark aluminum price increase 27% at end of August

Slide 9

Improving Domestic Competition Increasing globalization means expected increase in aluminum exports over next 5 years Increasing share of domestic demand fulfilled by imported aluminum High industry assistance caps import affect domestic production CAGR 3.62% CAGR 0.99% CAGR 3.71% CAGR 2.69%

Slide 10

Industry-wide Risks Industry overcapacity and excess supply Supply from developing countries may develop quicker than actual demand in their economies, thereby over-flooding the market and driving down profits Increased competition from alternative materials Designers and engineers increase usage of lightweight materials such as aluminum, composite materials and plastics Especially prevalent in automotive industry due to strict regulations regarding safety and efficiency Increased environmental regulation Production facilities may need to undergo capital-intensive restructuring and increase operating costs in order to comply with new regulations Limited availability of raw materials Problems with suppliers related to delays, defaults or limited supply adversely affect production by decreasing efficiency and increasing costs Source: Company 10- Ks

Slide 11

Key Financials CompanyIndexShare Price Market CapP/EVolumeEPSBeta Net IncomeEBITDAROA (%)ROE (%) Century Aluminum Co. (CENX)Nasdaq27.532.45 B67.13804 K0.412.3636.81 M121.29 M2.774.06 Kaiser Aluminum Corporatio n (KALU)Nasdaq72.651.28 B16.46515 K4.411.0283.50 M258.60 M5.27.61 Constelliu m N.V (CSTM)NYSE21.132.23 B13.651030 K1.550.49 (?)162.13 M367.92 M7.93N/A Reliance Steel & Alumimum (RS)NYSE64.425.03 B14.86884 K4.341.73341.00 M829.10 M4.998.68 Alumina Limited (ADR)- (AWCMY)OTC5.964.21 B--42 K-0.061.36-44.50 MN/A-0.35-1.54 Alcoa (AA)NYSE16.9419.97B--2103 K-1.981.07-2.14 M1.36 M2.89-14.5

Slide 12

Industry Rating Aluminum Manufacturing Industry Rating: Overweight Improving demand and high industry assistance give the industry a positive outlook 1.Industry Outlook Strong revenue growth due to increasing demand for materials from demand industries Increasing globalization raises exports but imports kept under control by high tariffs for nearly all aluminum products 2.Industry Risk Factors Profits may decrease due to falling aluminum prices from an inundated market Loss of revenue as demand industries explore alternative materials