Norsk Hydro Forecasts Modest Growth in Aluminum Demand -- Commodity Comment

Norwegian aluminum producer Norsk Hydro released its first-quarter earnings report on Wednesday morning. The report, originally scheduled for April 30, was delayed by five weeks as a result of a cyber attack. Here's what Hydro had to say about metal and energy markets.

Demand for Primary Aluminum to Resume Growth:

"Global primary aluminum consumption was stable compared to the first quarter of 2018, split between a marginally negative development in China and slow growth in the world outside China...Global demand for primary aluminum is expected to grow by 1%-3% in 2019."

Chinese Smelters to Raise Global Supply of Primary Aluminum:

"Production outside China is expected to increase by 2%-3% in 2019, compared to 1.5% in 2018. Production of primary aluminum in China was flat in 2018, but is expected to grow by 1%-3% in 2019, with mixed growth drivers including...some new smelters still ramping up."

Balance in Primary Aluminum Market Seen Roughly Stable:

"The global primary aluminum market ended at approximately 1.5 million metric-ton deficit in 2018, and is expected to be in a 1-1.5 million metric-ton deficit in 2019."

Demand for Rolled Products Resilient:

"Due to the ongoing strong substitution towards aluminum, demand in automotive continued to show a positive development [in the first quarter] despite a steep drop in car production resulting from reduced consumer confidence in Europe and lower car demand from China...European demand for flat rolled products is expected to increase by around 2% for 2019."

Guinea, Australia Dominate Bauxite Sales to China:

"China imported 25.8 million metric tons of bauxite in the first quarter of 2019, 27% higher than the previous year. Guinea and Australia maintained their dominant market share accounting for 81% of China's bauxite imports in the period under review."

Low Reservoirs Boost Nordic Power Prices:

"Nordic power prices were significantly higher compared to the same quarter last year, and slightly higher compared to the previous quarter...Water reservoirs in Norway were at 36.1% of full capacity at the end of the quarter, which is 3 percentage points below the normal level. Snow reservoirs were below the normal level at the end of the quarter."

Write to Joe Wallace at [e-mail]

(END) Dow Jones Newswires

June 05, 2019 07:07 ET (11:07 GMT)

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