Price movement that we’ve seen in the premiums we think is related to stronger demand too. So you’ve seen the Midwest premium move up, the European premiums move up and the Japanese premium moved up also. So, we’re really feeling as if we’re in a spot where we’re getting some tailwinds from the marketplace.
Michael Dudas: Excellent, Bill. Thank you.
William Oplinger: Thank you.
Operator: The next question is from John Tumazos with John Tumazos Very Independent Research. Please go ahead.
John Tumazos: Thank you. Will Alcoa apply for $0.5 billion grant like Century did? And do you have site infrastructure in some of your existing or prior facilities that would make it cheaper for you to build a large smelter in a brownfield or existing site rather than starting fresh?
William Oplinger: John, we have existing sites around the US, for instance, Massena East, which is the old Reynolds facility, Massena West, Point Comfort, Intalco, Wenatchee. Off the top of my head, I don’t know that any of those would have large enough electrical infrastructure to make a meaningful difference in putting a new site, a new plant there. So, on the margin, it may. I think those sites are much better suited for redevelopment. And that’s why we have our transformation group. And you have seen some of the real successes over the last couple of years, dating back to when we sold Rockdale for $250 million and we sold Eastalco for $100 million, we get real value out of some of these sites through a redevelopment program and then sell them.
And we’ll continue to do that. To answer your first question, we would need — to very similar to the comment that I made to Carlos, we would need renewable energy at a low cost to make a large investment in US. And in order for us to make that large investment, we would be going to the government also. It’s not in the works right now, John. That’s not on our agenda. We’ve not talked about that, and it’s just not on my agenda over the near term to have that done.
John Tumazos: So, if I can ask another, why do you think the government chose the April 13 cut-off date for forbidding the Russian metals as opposed to forbidding the pre-existing metal wherever it might be laying around? A lot of the aluminum is stuck in Korea anyway in warehouse.
William Oplinger: John, I don’t have a good answer for you. I can’t speculate why the government chose the date they chose. I’m just pleased that they took the action that they did and really think that it is the first step towards reestablishing the credibility of the aluminum contract on the LME and I’m glad they did it. And whether they’ve chosen the 12th or 14th, I’m just glad they did it.
John Tumazos: Thanks, and good luck.
William Oplinger: Thanks, John.
Operator: The next question is a follow-up from Lucas Pipes with B. Riley. Please go ahead.
Lucas Pipes: Thank you very much, operator. Thank you for taking my follow-up question. Bill, on the copper side, there is a lot of excitement about AI, electrification of everything, and obviously aluminum benefits as a substitute in many of those ways. But aluminum also competes for electricity. So, when you kind of think about the demand side, but then also kind of additional costs on the supply side when you net it out, what do you think does it mean for the aluminum industry longer term and how would you position Alcoa for that trend? Thank you.
William Oplinger: So, Lucas, thanks for the question. I fundamentally believe that aluminum is an integral part of the energy transition that will occur in the world over the next 25 years. Copper is critically important, but aluminum is right there also. There’s a historical reference point of like 3,500 — I’m sorry, 3.5 times difference between copper price and aluminum price that when copper goes up, there’s a substitution effect between copper and aluminum. We see that holding true today. And as copper becomes more expensive, we think that that will benefit aluminum. However, aluminum on its own and you know this story critically important to electrification, critically important to electric vehicles. You look at how much is used in applications around solar applications for the panels, the frames of the panels, the wind turbines, it’s a significant driver of aluminum.
And we’re looking at, I think, [indiscernible] 80% increase in aluminum demand between now and 2050. So, I think the future is really bright for aluminum and copper, but aluminum especially.
Lucas Pipes: And on the power side, what do you think it means for how you’re positioned?
William Oplinger: Well, I think on the power side, renewable green power is getting harder and harder, and it doesn’t define globally. And so, it doesn’t matter if it’s being used for something else associated with the transition of energy, but it is getting harder and harder to find which ultimately means that supply to some extent will be limited, right? So, supply growth over time will really be based on green energy. And if green energy sources are being used for other things like data centers, I think it limits supply. So again, you can tell, I’m pretty bullish on aluminum and I think both of those factors play into a stronger aluminum market in the future.
