United RUSAL : THIRD QUARTER 2019 TRADING UPDATE

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

UNITED COMPANY RUSAL PLC

(Incorporated under the laws of Jersey with limited liability)

(Stock Code: 486)

THIRD QUARTER 2019 TRADING UPDATE

This announcement is made by United Company RUSAL Plc ("UC RUSAL" or the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong).

Shareholders and potential investors are advised to exercise caution when dealing in the securities of UC RUSAL.

UC RUSAL announces its operating results for the third quarter of 2019 ("3Q19")1.

Key highlights

Aluminium

• Aluminium production2 in 3Q19 totaled 942 thousand tonnes (+0.4% quarter-on-quarter ("QoQ")), with Siberian smelters representing 93% of total aluminium output;

1

2

Operating data is based on preliminary data and may be updated in the 3Q19 financial results.

Aluminium production represented by salable products output (the number includes all facilities excluding Volgograd remelting of third parties metal).

− 1 −

• In 3Q19, aluminium sales amounted to 1,091 thousand tonnes (+0.8% QoQ). During that period, sales of value added products (VAP3) increased to 430 thousand tonnes (+3.9% QoQ) continuing gradual recovery of VAP share in total sales mix to 40% in 3Q19, compared to 38% in 2Q19 and 29% in 1Q19, that was then affected by external market drivers related to the OFAC4 Sanctions5;
• In 3Q19, the average aluminium realized price6 decreased by 3.8% QoQ to USD1,896/t, as a result of decrease of the London Metal Exchange ("LME") QP7 component (-4.0% QoQ to USD1,751/t).

Alumina

• In 3Q19, total alumina production slightly increased by 2.1% QoQ, to 1,957 thousand tonnes. The Company's Russian operations accounted for 35% of total output.

Bauxite and nepheline ore

• In 3Q19, bauxite production decreased by 6.9% QoQ, to 3,948 thousand tonnes. Nepheline production decreased by 11.1% QoQ, to 1,017 thousand tonnes.

Market overview8

• The global manufacturing PMI rose from 49.5 to 49.7 in September, two consecutive months of growth for the first time since 2017. This was mostly due to the jump in China's PMI index. However global manufacturing remains in contraction (since PMI is below 50 points). Growth also looks to have accelerated in the emerging economies, mainly due to a policy-driven rebound

3

4

5

6

7

8

VAP includes alloyed ingots, slabs, billets, wire rod, wheels, high and special purity aluminium.

"OFAC" - The Office of Foreign Assets Control of the Department of Treasury of the United States of America.

"Sanctions" - on 6 April 2018, the OFAC added the Company to its Specially Designated Nationals List.

The realised price includes three components: LME component, commodity premium and VAP upcharge.

QP (quotation period) prices differs from the real time LME quotes due to a time lag between LME quotes and sales recognition and due to contract formula speciality.

Unless otherwise stated, data for the "Market overview" section is sourced from Bloomberg, CRU, CNIA, IAI and Antaike.

− 2 −

in India. Despite this, there appears to have been a slowdown in the developed world as a whole, with the US and the euro-zone both posting slightly slower rates than in 2Q19. There are some signs that industrial production and exports, which have been the weakest parts of the global economy in recent months, may be bottoming out. But the trade tension between China and the U.S is still unsolved and continue to cause uncertainty in the market.

• As a result 3Q19 was disappointing and led to further deterioration in aluminium demand compared to 2Q19. Global primary aluminium demand decreased to almost zero growth in 9M19 YoY, and was at 49.5 million tonnes (ex-China it was down 1.5% YoY at 21.9 million tonnes and in China it was up by 1.4% YoY, to 27.6 million tonnes).
• At the same time rest of the world ("RoW") aluminium production grew during 9M19 by 1.3% to 20.9 million tonnes and this negatively impacted premiums, the LME price and inventory buildup.
• Overall, RoW aluminum market was in a deficit of around 1 million tonnes during 9M19.
• Looking at the cash cost curve, in the RoW today, around 18% of smelters or 5 million tonnes operate at a loss despite the decline in cost of raw materials. Unless this leads to production cuts, it is expected that the LME price will stay depressed in 4Q19.
• Chinese supply both for domestic production and exports was significantly reduced in 3Q19 compared to the previous quarter and is likely to impact the supply into the RoW and thus provide some support to the LME price going forward.
• Operating capacity in China during 9M19 has decreased due to series of disruptions in the Shandong province and now stands at 35.7 million tonnes at the end of 3Q19 compared to 36.6 million tonnes at the end of 2Q19. Overall production in China during 9M19 was 26.7 million tonnes, down 1.7% compared to the same period of 2018. Chinese regional stocks continued their strong decline in 3Q19 and are now below 945 thousand tonnes vs 1.05 million tonnes at the end 2Q19.
• During 9M19, China's exports of unwrought aluminum and aluminum rose 2.9% YoY to 4.4 million tonnes, although this was more a result of a first 5M19 growth, with the gains being gradually eroded since June. Exports growth slowed to 2.4% in 9M19 YoY vs a 5.3% rise observed in 8M19 YoY.

− 3 −

KEY OPERATING DATA
GROUP PRODUCTION DATA9
			Change, %			Change, %
('000 tonnes)	3Q19	2Q19	(QoQ)	9M19	9M18	(YoY)
Aluminium	942	938	0.4%	2,809	2,810	-
utilisation rate	96%	97%		96%	97%
Aluminium foil and
packaging products	25	25	-1.9%	73	70	5.1%
Alumina	1,957	1,918	2.1%	5,808	5,816	-0.1%
Bauxite	3,948	4,242	-6.9%	12,021	10,128	18.7%
Nepheline	1,017	1,144	-11.1%	3,170	3,476	-8.8%
GROUP SALES DATA
			Change, %			Change, %
('000 tonnes)	3Q19	2Q19	(QoQ)	9M19	9M18	(YoY)
Aluminium sales	1,091	1,082	0.8%	3,069	2,794	9.8%
incl
BOAZ10 aluminium
product sales	70	67	4.2%	175	98	78.7%
Other third parties
aluminium
products sales	8	1	641.1%	11	54	-79.6%
Realized price,
US$/tonne	1,896	1,970	-3.8%	1,937	2,304	-15.9%
LME QP component	1,751	1,824	-4.0%	1,805	2,138	-15.6%
Realised premium	145	146	-1.1%	132	166	-20.2%
VAP sales in tonnes	430	414	3.9%	1,103	1,331	-17.1%
Share of VAP	40%	38%		36%	48%

1. Unless stated otherwise the production data throughout the report is presented on equity-adjusted basis (for exceptions please refer to the data of the Boguchansky aluminium smelter and Boguchanskaya HPP). Production volumes are calculated based on the pro rata share of the Company's (and its subsidiaries') ownership.
2. "BOAZ" - Boguchansky aluminium smelter

− 4 −

ALUMINIUM PRODUCTION
				Change, %			Change, %
('000 tonnes)	Interest	3Q19	2Q19	(QoQ)	9M19	9M18	(YoY)
Russia (Siberia)
Bratsk aluminium
smelter	100%	253	252	0.5%	754	755	-
Krasnoyarsk
aluminium smelter	100%	256	255	0.5%	760	760	-
Sayanogorsk
aluminium smelter	100%	136	133	1.8%	402	399	0.5%
Novokuznetsk
aluminium smelter	100%	54.1	53.5	1.1%	161	161	-
Irkutsk aluminium
smelter	100%	105.6	105.2	0.3%	316	314	0.6%
Khakas aluminium
smelter	100%	72.7	72.9	-0.3%	219	218	0.4%
Russia - Other
Volgograd aluminium
smelter	100%	17.7	17.2	2.9%	52.1	46.7	11.6%
Nadvoitsy aluminium
smelter	100%	-	-	-	-	6	-
Kandalaksha
aluminium smelter	100%	18.2	18.1	0.6%	54	54	-
Sweden
Kubikenborg
Aluminium
(KUBAL)	100%	28.7	30.9	-7.3%	91.1	96.3	-5.4%
Total production11		942	938	0.4%	2,809	2,810	-
Remelting of
third-party primary
aluminium at
Volgograd smelter		-	-	-	-	1.9	-
Total aluminium
products output
including remelting		942	938	0.4%	2,809	2,812	-0.1%

11 Here and further "total production" may not equal to presented above in the table. The difference arises due decimals).

the arithmetic addition of the numbers to the roundoff of exact numbers (incl.

− 5 −