And we are alive. Good afternoon, Ludovic. Good afternoon, Patricia. How are you? Good. Yourself? Pretty good. Thank you. Hello Patricia, thank you for being here. Hello Enrico, thank you to you, La Trivenita and Nexans for having me today. Thanks, Patricia. Excellent, excellent. We're just going to give a couple of minutes since you are users. Log in to the webinar from there on we'll be We are talking a little bit about ourselves and initiating the webinar. Hello, good afternoon. Have a good afternoon. Welcome to another Voltium Academy session. Good afternoon, Romana. Good afternoon, Anna. Good afternoon, Florian, Gianluis, Anne-Catherine, Claudia, Torpena. Christian, Christiana, good afternoon to everyone. Welcome to another Baltimore Academy session. It's a pleasure to be here with you. You can see that our chat is disabled, but you are still still able to share your questions Okay, so my name is Enrico. I will be your host today representing Vultr. and today we have an excellent topic to discuss. to talk about uh we have ludovic and patricia here with us we'll be discussing the rising stakes and costs of copper is a well-known mineral that is present. our daily lives and how it affects the NAPN. electrical industry. The whole structure of the webinar is pretty simple. We're going to have between 20 to 30 or 35 minutes presentation and after that we will have from 10 to 20 minutes Q&A session. Feel free to share your questions along the presentation. And once we come to an end of the webinar. We will be getting back to you and answering your questions, Ludovic and Patrice especially. So I would like to thank you all for being here. I would just like to remind you that we recommend to use Google browser. Google Chrome browser but if you are using any other browser such as Mozilla or Opera or Edge and it's working Fine, I'm glad to know. So if there's any... technical issues please just try to refresh the page disconnecting Connect again, we will be here. My name is Enrico. It's a pleasure to be here with you all. We're just going to give a couple of extra minutes, one minute extra, so we have more people joining us. Before we start... Just to remind us that there are subtitles available for today's webinar. just click in the button below on your screen and select your There are subtitles in German and French. So over there you are able to select your desired one. Welcome George, welcome Lisa, welcome Nadia. Welcome, Frederick. Welcome to everyone. I can see we have a lot of participants from all around the globe, which is very exciting. Thank you. Thank you for being here. Welcome to another Boltzmann Academy session. reminding you that this webinar will be running from 20 to 30 minutes you can extend a little bit and after that we will have 10 to 20 minutes Q&A session. Feel free to share your questions throughout the seminar. We also have subtitles available today. Please select your desire. language on the bottom of the screen you have from French and German as well. And with that said, I believe we can start. It's a pleasure to have you all here. My name is Enrico. Welcome. I would like to give the word to Ludovic so he can... He introduced himself and after Patricia will introduce herself and from there on we will start the webinar. Welcome. You're the big thank you. Thanks Enrico. Hello everybody. My name is Ludovico Finial. I am Chief Purchasing Officer for Nexans Grill & Co. connect which effectively is the low voltage and medium voltage for europe which represents more or less 20 plants in about 11 countries. Thank you, Naiko. Pleased to meet you Thank you very much Ludovic. Hello Patricia, thank you for being here. Hello Enrico and thank you for having me again. I am Patricia Magarzo, I'm Area Sales Manager in Aurobis for Italy and Middle East. I've been working in the copper sector for the last four years. So I'm not an expert because in this industry you keep learning. every day but well I have some expertise Before that I worked around 12 years in stainless steel and logistics. Yes, excellent. Thank you very much, Patricia. Thank you. Thank you for being here. It's a pleasure to host you. in another Baltimore Academy session. I would like to ask you a little bit to... share your screen so we can start from there. reminding all to all attendees that there are subtitles available here In the bottom of the screen you can select your desired language. This session will be recorded and made available in our Baltimore Academy in There website where you can access this session and another other webinars as well about the electrical industry And here we have rising copper, rising stakes. Yes, Ludovic. Okay. As I said, thank you Enrico, thank you Patricia for being with us. So we'll... guide you today through the stakes of copper. and the recent development and why we had such a recent developments. Before that, just a few words on Nexense. Nexans as a group represents 7.1 billion. when it comes to Europe. So we are... present in more than 13 countries in Europe. With 21 facilities. and globally within 41 countries. More specifically, we've had the pleasure to welcome La Treveneta Cavin The next science group in 2024. And you see here on the screen a few parameters and KPI of Latria. Based in Brindola in Italy. and exporting to more than 30 countries. globally which is as well why we do this webinar in English but that gives you a few vision of Latria Net Agavi. in a slide. We're going to talk about copper. and as such when it comes to Nexense, Nexense has been over the past The years and the past decades trying to vertically integrate itself. in terms of copper, not just buying rods. externally, but producing roads. to make sure that we can control the entire chain. And in Europe, we have one facility in Lens, which is in north of France. in which we are producing rods since 1971. and in which we have announced last year a significant investment of more than 90 million euros. to bring the capacity of the plant from 160,000 tones to 240,000 tones. and most importantly, and we'll come to that afterwards. using more than 30% recycled content. So it means that as of 2027-28, we will have to... to be able to collect more than 80,000 tons. of recycled copper because we know that it's going to be a constraint. in the coming years. How are we going to achieve that? There are multiple ways we're going to work with recycling companies. but one item that presents today is the cable loop that has been deployed in France mainly and will be deployed in other countries. which allows the distributors to collect back Scraps, sorry for my voice, I am a bit sick today. but allowed to collect scrap. from the electrician, from... from the distributors and we get back the scrap. and we reuse obviously the plastic as well as the non-ferrous metal whether it's aluminum or copper in new cable so So this is how in building this ecosystem we will... make sure that we can continue to electrify the future and that's together with our business of course, but as well together with you as our customer. Now I will switch to one video from our VP of Metallurgy Xavier Mathieu. who will introduce the matter of Cooper. Dear partners, as I am unfortunately unable to be with you in person for this webinar, I will be introducing the topic of... on the year 2026. First, let me briefly introduce myself. I am the Vice President of the President of Metallurgy at Nexans Group and in this role I oversee the plants responsible for transforming copper raw materials into conductors. as well as the sourcing of all non-ferrous raw materials in semi-finished products. products for the group. Today, at the request of La Trivenita Cavi, I will address the hot topic of copper. which has been experiencing significant shifts. in its economic environment since the beginning of the year. I will talk about two main topics. Number one, the Copper Price and number two, the Copper Castle Premium. to begin and for those who may not be familiar with the copper raw materials value chain. Copper conductors that carry electricity inside the power cables we manufacture are produced from a semi-finished product. called 8mm copper wire. itself obtained by melting and casting corporate casels. Copper castles is generally considered the first stage of the copper value chain. as it is the earliest format in which copper reaches Near perfect purity level. at 99.99%. Cassots are traded on the LME, non-metallic change. and form the basis of what is commonly referred to. as a couple price. I will therefore focus primarily on Copper Castle. There are three main points. which are driving Copper Castle's prices. First, global deficit or surplus. Global corporate consumption is estimated to reach 28 million tons. in 2025 with a year-on-year growth rate of about 2% to 2.5%. five percent At this pace, global corporate consumption doubles roughly every 25 years. What happened in 2025? Was there a deficit or a surplus? At the start of the year, the Mariana was expecting a small surplus of around 400,000 tons. However, several incidents in underground mines during the year. significantly reduced output. bringing the expected circus down to nearly zero by year end As a result, Copernagel in 2025 is essentially balanced and projections for 2026 indicate a similarly stable situation. This environment creates tension in the market and pushes prices upwards. Second, regional imbalances. At a regional level, the situation differs somewhat. Copper castles are produced in certain parts of the world. and consume in others, which means that... Some regions are net exporters while others are net importers. Neuron, for example, is a net importer. and faces a significant supply deficit. Regions in deficit must pay a higher premium on top of the quoted corporate Last point. tariffs and other tax measures. Taxis, duties and tariffs. also influence global and regional supply chains. For example, 2025 has been remarkable in this regard. due to the introduction of 50% tariff in the United States on copper semi-finished products. Though Coppercastled themselves, remain exempt with a zero percent rate. The direct consequence of these tariffs Is that the US now attracts as many copper casels as possible. which in turn creates shortages in other regions. such as Europe. The only way for the market to redirect physical material to deficit regions like Europe. is to increase the Catholic premium for Catholic surcharge. in order to remain competitive and attractive. In conclusion, the three key drivers I mentioned in my presentation Presentation of global tension between copper supply and demand. Europe's structural corporate deficit. and its reliance on imports. and US tariffs which force other deficit regions to pay higher premium to secure copper On the one hand, structurally, copper prices are expected to rise. Prices have already reached US$11,000 per ton. and several banks predict further increases. And on the other hand, situation in the United States. is pushing Casa Prim upwards. with year-on-year increase of around 90 to 100 US tonne of Paton in Europe. This is the unavoidable cost. our industry must bear to secure copper units for production and consumption. For your information, US consumers are currently paying up to 500 US dollars per ton. above LME to obtain copper units. whereas in Europe we pay roughly 320 dollars in surcharge Thank you for your attention. I will now hand over to Patricia from Orbeez who will guide you through the next part of the presentation. Thank you, Xavier, for the presentation. I'll hand over now to Patricia to go a bit deeper in. Aobis. Patricia? Thank you, Ludovic. Before we endeavor in the intricacies of the copper sector and our rubies, Let's start with the basics because maybe our audience is not familiar with some of the concepts we're speaking about. Copper is the oldest metal used by humanity. is excellent for heat and electricity. electrical conductivity and it's indispensable for life. It can be found on Earth's crust and is not rare. but it's very reactive and it's mostly found bound with oxygen and sulfur. to form other minerals. For instance, within it creates bronze. So in order to be able to use the copper in cables, it needs further processing. There are two main sources of copper. One is as a mineral. You can find it in rocks in any structured. By mining, these rocks mainly contain, usually contain less than one percent of the soil. percent of copper although in south america you can find some deposits with up to five percent. But it needs. it needs to be processed. That is done by smelters. which by some processing I'm not going to speak about because it's technical can can obtain what is called industry concentrate that is mineral with up to 20 20 to 25 percent of copper copper content Another source of copper is scrap. or secondary concentrate is called primary copper. and other sources scrap what you find the thin the thin wires you can find in your phone or computers for instance. those can be put again in the process. and it's called Secondary. Copper, by the way, can be recycled over and over again without losing any property. Partizan So from these two main sources, concentrate and scrap, and by via of further processing and refining more and more the cop you can obtain cathodes. Cathode is basically a square one millimeter by one millimeter one meter by one meter and its weight is approximately 60 kilos. with usually a copper content of 99. point ninety nine percent already victor has uh xavier has already spoken about it but I think this slide is very useful to our audience. Gatot is also the basic product for the copper industry. From cathode we are further processing. you obtain wire rod. Wire rod is a cylindrical wire cylindrical bar. It's made from pure or alloyed copper. and is typically produced by continuous casting or extrusion. comes in different diameters 8 millimeter is sort of the the fifth stock for the wire and cable industry. So I think this slide is the speaks about the basics of the copper. No. Let's jump to our rupees. I want to mention in the previous processing of copy. per other metals can be obtained other minerals and metals can be obtained and also sulfuric acid This is important to understand some of the slides we're going to speak about later. So now our rubies. Well, our rubies is the short... For our rubrum in Latin means Red coal, that's what copper is considered. Our Ruby started almost 160 years ago in North America. from Germany as a pure silversmith. and is today an international group with more than 20 medals in its portfolio, not only Copa, but also gold, selenium, platinum, sulfuric acid. and others. Today we are one of the world's largest producers of copper cathodes. the third wide-road producer in the world. and the largest copper recycle in the world. Next slide, please, Ludovic. We are an integrated smelter, that means we use both raw and recycled materials. materials to produce copper in the form of cathodes. but also other semi-products, semi-elaborates like like wire rods, bars and other semi-finished products. In our processing, as I mentioned before, we also produce gold, silver, platinum, selenium, acids, sulfuric acid, acid and other metals up to 20. Next slide. We call our process closing the loop. We like to stress closing the loop. because the process can go over and over again. Using recycled material that can be thrown in the furnace again. and used to produce cathodes and other semi-products. So it's basically a... It's an eternal process. Here you have an insight of our our portfolio for instance of cathode we produce one million a bit more than one million tons Spare. WireRod will produce around 850,000 here. are the numbers for last year. These are going to produce a bit less. 860,000 but still we are the third producer of wire rod. in the world. Let's remember that one road and millimeter is the feedstock. for the cable industry. Next slide, Ludwig, please. We are present in many locations. We have two primary smelters. meaning we use concentrate. and those are in Hamburg and Pirdog in Bulgaria. And we have other secondary smelters using scrap. and our own cathodes or also purchased cathodes. Those are in Åland, in Lunen and we have some other locations. Regarding wild rot, we have four plants in Europe. Two in Italy, one in Belgium, two in Germany. and with our four plants we can secure the supply of water to our customers. like Latriveneta and Nexans. Next slide, please. So that was Arubis yesterday and today. but what about tomorrow well we are at the epicenter of the future mega trends. The experts nowadays speak about about urbanization, international... sorry, artificial intelligence. defense and security renewable energies those are megatrends who are going to need not only copper but the other metals that Arubis produces. So we are really at the... at the core of the meta-mera trends. for these industries. Next slide, please. and we do it sustainably, sustainably. Tomorrow Metals is our promise towards sustainability. and embodies our commitment to source and produce materials responsibly. In our website you can find our LCA's. LCA's is the short term for life cycle analysis i always have to think about the world and show, for instance, we have here three products. We have spoken about. Forks road, by the way, we haven't spoken about, but it's road with a lesser the content of oxygen so for more specialized applications but it's also In the form of rod 8 mm. Peter. and for instance, wire rod... contains 36% of recycled material. and its carbon footprint is 44% lower than the industry average. So it means when we are processing and producing wire rod for Latri Veneta We are doing it. better in sustainability terms. than the industry average. Let's let Ludovic, please. What about the dynamics of corporate offer and and copper offer and demand. Copper, as I said before, is not rare. In the earth, it is estimated that there are 40 years of reserves. reserves are identified and viable. and 200 years of resources, meaning It is estimated that the Earth can provide copper for another 200 years. Only these deposits need to be discovered and identified or discovered. but it's unlikely that society will run out of copper. But this copper has to be processed and that's what Arubis and others melt. filters do and the world demand for copper for fine copper is cons It consistently outpaces the process copper. offer. Basically mining. mining is not enough to meet the demand of copper and is growing as Victor said The expectation is that by 2050 the copper demand is going to double. and mining cannot follow track. So recycling basically has to take up. for the gap between the demand and the offer. Next slide, please, Ludovic. So just choosing two geographies, North America and Europe. We can see here there is a consistent in these two graphics. see very well that there is a consistent and structural deficit for refined copper Per. And you can see in Europe it's around... Sorry, I cannot see the presentation and the figure. Oh, that's really loud. I think I was out for a moment. Yes, you're back now. Good on Mac. So here you can see that in million tons... there is always a deficit in both in Europe for refined copper for both in Europe in North America. but even higher in North America. Basically, North America... That includes Canada, not only USA. But basically the demand doubles the production and it's gonna be deeper and deeper until in the future. and it's going to be even a higher deficit than... than in Europe. In the next slide, we can also... Please, Ludovic, can you change? In the next slide... Also, choosing these two geographies, we can see that for the cathode, Again, it is evident that Europe and North America have a deficit. and demand is always higher than production. globally we can see the production is also only slightly above demand. So. Basically the world is demanding what is produced, the trend is going to outpace offer. and North America, Europe. are always on deficit and that's gonna happen. in the future. Let's jump then to the Copper Market review. First, let's have a look at how the copper how the prices for wire rods are sort of set up. The price of... for wire row 8 millimeter wire rod is a result Basically it's a result of the processing from copper rock to the shiny Fred's brought. It's not... The price is composed not only by the purchase price of the mineral, but also by the TCRCs. that is the refining of the concentrate and the recycling. Plus you have the price of the copper traded on the Here is written LME, that's what. our rupees follows but there are other stock exchanges where the the copper is traded like comics we probably have heard about it. And there's also um premium for or processing cathode mineral concentrate or scrap into cathode. and then the transformation process of cathode into wire rod. plus other costs like transport, packaging, etc. etc uh next slide please ludovic And what drives the marketing in 2026? jump to the next slide because this is a bit too too heavy with too much information. I will make a summary, but you can see better in these next slides with the graphs. There is a strain supply. So you see the concentrate deficit we have been speaking about that. that Xavier also mentioned is very well shown here in the next The graph shows next two years there is a consistent deficit. need of concentrating the market until year 2028. Here the graph shows 2027, but it is estimated that this There's going to be a deficit of concentrate supply. in regards to the demand of around 800,000 tons per year. There will be, it is expected that some smelters will. have to close, for instance, smelters in China, in Japan and Oceania. cannot go on with low tcrc's the the charge ...surcharges for refining copper, especially now that the price of sulfuric acid has... has dropped. So basically many stelters will have to to close and it is expected that additionally 300,000 tons will disappear from the refined copper market. So that puts more fuel to the fire of the... consistent concentrate deficit. On the right hand side we can see that mining cannot follow track to the deficit. Did you see that the expectation to increase the mining, the figures? but it's always lower than the... than the supply you see on the left. and this mining this graph doesn't show the effect of the closure of the grass-fed mine that happened in Sep. September the Grasberg mine is the second largest mine in the world. after the escondida in Chile. Grass berry is Indonesia and is exploited by free-pocked mackmoran. There was an accident where some workers died. and the mind was closed. that erases almost 600... thousand tons of refined copper off the market. So again, we are speaking that apart from the copper concentrate deficit, there is a trend. and because the money is higher the mining cannot cannot cannot follow track Next slide, please. Well, here we can see uh um Speaking about the prices, but before that, I will add that... the demand It's also a factor in 2026. We have already spoken about it, but the mega trends are probably be. a very strong role already this year. investment in defense. energy transition in the uh intel artificial intelligence sorry because sometimes I work in Germany and sometimes the work The words crossed my mind. and I have to find the words in English. So basically we have been speaking the factors that will affect that will have an effect on next year copper market is always deficit concentrate deficit a potentially strong demand and then the prices that the pressure to bring the prices up not only because Deficit and demand are playing a key role. But you see here that... before even the Grasberg disruption in... In September in Indonesia already the banks, institutions and gurus were predicting for next year, a prize for the LMA. on the yellow market of $9,800 per ton. And after the Grasberg incident, now the expert speaks about 10,500. dollars, perdon. And just as a reference, the element must stay at at the level of 10,000 dollars per tonne. for new mining projects to start. because otherwise there would be no incentives to... to start new mining and to put more supply. of copper in the market. Another, next slide, please. Another effect on the copper market you probably have heard a lot about but they arbitrage between the commerce and lma and that might also play a role next year And you might ask why? Well, First, let's speak about arbitrage. What is arbitrage? Well, arbitrage is the exploitation of the price differences for the same asset. in different markets or locations. So basically the traders are buying in the in the cheapest location or market. that's to say and selling in the most expensive so they can cash the difference That was happening. Also another explanation what LME and commerce. It might not necessarily familiar to all. Basically, the copper is traded in... in different different stock exchanges but let's say the more the more famous or the most renowned. and it's not only but the society chief in shanghai but basically in the copper sector we always pick up the LMA prize and the comics. price and is the price of the copper traded in the lma in london The LMA is the reference. used usually globally as a benchmark for physical physical pricing of copper around the world. while commerce reflects usually the domestic conditions in the United States. So what happened this year between the commerce and LMA and this arbitrage? Well, it all... The reason is Mr. Trump and his government basically in February. the government, US government started an investigation. It's called investigation under 232 session. basically is a provision in the trade law of the United States. that allows the government to impose tariffs if they think there's going to be a risk for there are national security security risks. So the comics were participating the tariffs everybody was thinking that mr trump would impose tariffs on cop Not only also in aluminum and other metals, but it was quite probable that Mr. Trump would would impose these those tariffs and so the the prices on the comments started to rise. and there started the arbitrage between the COMEX and the LMA. At the beginning of July, Mr. Trump announced 50% of... of tariffs on copper and by then the arbitrage between the commerce and the lma was 30 percent up to $2,400, meaning a trader. buying in the LMA and selling in the COMEX. was earning 2,400 US dollars. I'm not speaking about... taxes etc. I'm just speaking about the the arbitrage between the two. exchanges and all the copper all the cathodes were moved to to the States. By the end of July, the U.S. government clarified that the 50% would only be... imposed on the semi-elaborates that is why i wrote but not on concentrates and that alleviated the arbitrage meaning they are the the the price difference uh was almost reduced to zero. But why might it... play again a role next year. because the market is anticipating new tariffs in 2027. So all the experts say Mr. Trump and his government. will in the end impose tariffs on concentrated and refined copper. And the CMEA group owns the comics. is one of the indexes of this group. are building stocks and inventories on copper. So the copper is again moving. to the States, the Catholic premium is is much higher in Europe, but it's much higher in America. So there is a huge appetite in... in the in the states markets for copper concentrate and cathodes. So next slide and it's a summary. Basically. a summary of the copper market and the whole presentation. is the mine of demand of refined copper. and hence cathode. Outpaces supply. The LMA prices or the prices the copper price traded are higher than expected. Let's remember the number 10,500. I think in October it even reached 11,000, more than $11,000. The European Catholic Premium, as you see here. is one of the highest in the world and is expected to stay higher. As you see, we have the graph until... until summer, but the trend keeps up. and the American copper premium. So what an American customer pays for a cathode is even higher than in Europe. and the surcharges for treating the the mineral and make it into concentrate and for the recycle cleans are also on a trend up. showing smelter demand. and the appetite for concentrates and recycling. So after my speak, I don't see the audience. I only see Ludovic, so basically I think I'm like... Speaking to myself, well... We've come to the end of the disclaimer about all the data that was we have provided are based on assumptions. experts in our rubies and please take this information with care but it provides a good overview of what is happening on the copper market. and that has an impact on the cable. On the wire road. and why you purchase for your keyboard. Yes, excellent. Thank you so much, Patricia. Thank you very much, Enrico and Ludovico. We will pause for a couple of minutes if you want to ask any questions. and we'll try to take some of the questions. question there are some guidelines on the screen on Obviously, what can we say and what we cannot say. for compliance reasons. so just for you to have a look and i will stop sharing my screen my screen in a second and then we'll look at any questions you may have But thank you already, Patricia, for this detailed explanation. Thank you all for having me again. Excellent. Thank you so much, Patricia. Super interesting. A very interesting topic indeed. Thank you very much, Ludovic. I would like to invite you all the attendees here. in our webinar to share your questions. please click on the input box text on the top right side that you can share your questions with us about the electrical industry about the this information that it was here shared and perhaps you have a concern perhaps you have a curiosity perhaps you have a an idea of what this resembles to you and your industry and would be great to to hear your questions please I imagine. Okay, excellent. Would you like to read it Ludovic or should I read it? Oh, you can read it, Nico. I can feel that you want to read it. go ahead i do i do hi there philip thank you for your question i really appreciate it thank you so much uh philip uh ask us uh beside the effects on lme and premium do you also see the cost increasing effects on the route premium in in Europe. Do you want to take the question, Patricia? So when you say Roth premium is transformation prices. Yeah, I assume so. Well, we have been speaking about, we call it transformation. should charge, just for the record. So when you say a rot premium, I have to think. What? Again, I have to think what we're speaking about. Well, we have been speaking that demand is higher than offer. that also affects us because we are again purchasing concentrates purchasing recycling to produce cattle to produce road So... again the man and the dynamics between the man and and offer have a role to play. Of course, we have higher prices. and that goes down to all the production. Then we have higher prices like transport costs. higher packaging costs, we have already been speaking about it. We are in a rubies at least. We are investing in sustainability. We are hard investing in sustainability. That also comes to a cost. and I mean all the related costs for production for for producing a wild rot are increasing. So yes, there is an increase in the transformation price again so Maybe it was... To add, Patricia, I think on the transformation itself, I think you're right. demand versus supply is right now when we look at long long-term view there are not so many investments