Norsk Hydro’s shares up 5.5% in anticipation of full production resumption at Alunorte

Norwegian metals maker Norsk Hydro recorded a rise of its shares on Monday, April 15, after winning further support to resume full production at its Alunorte alumina refinery in Brazil.

After operating at half capacity for over a year, the Alunorte refinery on April 12 saw a hope to resume full production, when Ministério Público and Alunorte provided a joint petition to lift the production embargoes at a conciliatory hearing in the Federal Court. The independent engineering consultancy Rambøll, which was hired on behalf of Ministerio Publico to conduct a third-party assessment, also confirmed Alunorte’s ability to resume safe operations.

On this news, Hydro’s shares rose as much as 5.5 percent in early trade on April 15.

“Conditions appear to be in place to secure a positive outcome,” brokers DNB Markets wrote in a note to clients. JPMorgan also anticipates that Alunorte will return to 100 percent output in the third quarter of this year.

The refinery is the world’s key supplier of alumina. It has an annual production capacity of some 6.2 million tonnes, compared with global output close to 100 million tonnes, according to the data shared by Norsk Hydro on its website.

A decision to restart Alunorte’s full production would be a rare piece of good news for Hydro, which is still struggling to recover from cyberattack and power outage that paralysed parts of its production, cutting by 10 per cent and forced many units to switch to manual procedures.

However, the final decision to lift embargoes from Alunorte’s production lies with the Federal Court now and there is no further indication yet as to when the court decision is likely to be announced.