Integrated Annual Report 2024 SECTION 3 • CHARTING THE PATHWAY TOWARDS EXCELLENCE 25 Outlook for 2025 The aluminium market is expected to remain highly sensitive to ongoing geopolitical fragmentation, due to tensions arising from the Russia-Ukraine conflict and the US trade disputes with other countries. These factors could lead to demand-supply imbalances and price volatility, which require close monitoring and adaptability to the changes in the global political landscape. With geopolitical tensions mounting, it is crucial for us to stay agile and adapt to the market dynamics to maintain our competitiveness. To this end, we are focused on strengthening our supply chain resilience, expanding our sales network, and building strategic partnerships with upstream business partners. As aluminium prices remain volatile due to supply constraints and increasing demand from green sectors, managing input costs effectively and swiftly adapting business strategies will be critical to capitalising on emerging opportunities. Geopolitical Tension The Market We Operate In Global Megatrend Aluminium plays a critical role across various key industries, and its significance is growing as the world continues its push towards decarbonisation. However, ongoing tensions between major trading nations have been a persistent factor disrupting global supply chains. Protectionist policies, such as tariffs, trade restrictions, export quotas, and financing limitations, have created an uncertain environment for the industry. In April 2024, the US and the United Kingdom jointly imposed a ban on the import of Russian aluminium. Meanwhile, the EU has banned aluminium products such as wire, tubes, and foil, which account for less than 15% of its aluminium imports18. Although the EU continues to import Russian aluminium, volumes have decreased over the past two (2) years. Western sanctions have led to increased isolation of Russian metal producers, with Russia redirecting its aluminium exports to China. In the backdrop of escalating global trade tensions in November 2024, the US unveiled its trade policies, which will impose a 25% tariff on imports from Mexico and Canada, along with an additional 10% tariff on goods from China19, further straining international trade relations. These measures add to the expanding wave of protectionist policies and deepening economic friction between international trade relationships. At the same month, China announced the end of tax rebates on aluminium products exports, a decision anticipated to lead to a decline in export volumes20. These actions by major trading nations highlight the increasing fragmentation of the global aluminium market, with distinct regional segments defined by trade barriers. This trend is expected to persist as long as current geopolitical tensions continue. Impact on Business Operations • Geopolitical tensions, trade conflicts, and sanctions can disrupt the global aluminium supply chain, causing price volatility. However, these shifts in the aluminium market also present new opportunities for market access. • To mitigate these risks, we have implemented proactive strategies to secure our raw material supply, explore new markets, and enhance the sustainability of our practices.
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