Falling aluminium demand causes Hydro to partially curtail production at its Karmøy facility

Falling demand for aluminium billets in Europe due to the adverse European economic condition and rising energy prices has caused the Norwegian aluminium smelter to partially reduce its aluminium production in Hydro Karmøy and Hydro Husnes.

The choice will result in a reduction in annual primary aluminium production capacity of 110,000–130,000 tonnes, including recently halted output for routine maintenance that has not yet been resumed. Once the curtailment is fully implemented, there will be a reduction in power use of somewhere between 170-200 MW overall.

Eivind Kallevik, Executive Vice President and Head of Hydro Aluminium Metal stated, “The extraordinary situation in the European economy and energy market is causing market uncertainty and a decline in demand for our aluminium products. Even if 50 percent of Europe’s primary aluminium production capacity has been curtailed during the last year, recent drop in demand is causing a buildup of stock, forcing us to take firm actions.”

Hydro adopted mitigation measures in July to adjust to the market environment and provide guidance on uncertain markets. In addition to closing Slovalco, the Slovakian main aluminium factory that was majority owned, at the end of August, the Norwegian aluminium smelters have now implemented further steps. The choice to partially reduce Hydro Karmøy and Hydro Husnes won't impact the number of employees working at those plants.

“While the short-term market trend is falling and uncertainty prevails, underlying market trends longer-term will remain positive due to the rising need for aluminium in support of the European green transition. We believe that with Norway’s strong industry framework conditions, including access to renewable energy, Hydro’s Norwegian aluminium smelters are well positioned to capture the growing market for low-carbon aluminium. We will use the temporary curtailments and somewhat reduced activity levels to bring forward planned investments to develop the plants for future demand growth,” added Kallevik.