Recently, MetalMiner had the pleasure of speaking with Norsk Hydro about aluminum market trends, market insights and the general market outlook for the aluminum industry, especially in the U.S. As the premier green aluminum producer in the United States, Europe-based Norsk Hydro continues to make significant strides in helping to convert the aluminum extrusion market from traditional smelting into more environmentally friendly options.
This month, we touched base with Mike Stier, VP of Finance and Strategy of Hydro Extrusions, and Duncan Pitchford, President of Hydro Aluminum Metals USA.
Get weekly updates on macroeconomics, price trends and commodity news which could impact your aluminum buy with MetalMiner’s Weekly Newsletter.
Can you comment on the impacts of the Russian aluminum ban for the LME and the CME?
“When it comes to Russian metals, Hydro was one of the first companies to exit doing business with Russian producers. When it comes to market impacts, we haven’t met any because there was a high duty imposed on Russian metals ages ago. Many large producers self-sanctioned against Russia.”
When do you expect some form of CBAM legislation to have a meaningful impact on the U.S. aluminum market?
“We have seen them in the EU in a form that has caused some issues. When it comes to potential legislation in the U.S., we have a couple of bills that have been introduced in Washington which would pave the way for a CBAM mechanism. However, that is quite some distance away. The one which is closer is the global arrangement on sustainable steel for aluminum. This could come much sooner. But as far as a CBAM into the U.S., that would be in the future.”
Where are you seeing risks to the North American aluminum industry – both in terms of the raw material supply chain and semi-finished product demand?
“No nearby significant disruption currently. However, we have seen some disruption due to the Red Sea attacks. It takes longer for materials to come from the Middle East than it has in the past, and there’s also been disruptions from the Baltimore bridge collapse, but it is close to resolution now. They reopened the 50 ft channel and we anticipate full opening of the channel very soon. Besides a black swan event, we don’t see anything else.”
Ever felt like suppliers are trying to sell you the Brooklyn Bridge? Time to flip the script. Join MetalMiner on 7/10 at 12PM CST on LinkedIn Live as we reveal specific strategies and examples of how deep price intelligence can transform your procurement and supply chain strategies.
What is Norsk Hydro’s current demand level? Are things improving on a quarterly basis, or slowing?
“If you look at different categories of different semi-aluminum products, extrusions are down, the stats show that. Particular segments inside of that might be weaker than others. Other semi-finished products are weaker than they were in the past, such as with packaging.”
“Further downstream, we’re seeing continued weakness in BNC, which has been a challenge, especially with the Fed’s interest rates. It’s impacting how people invest in aluminum and expansion-wise. BNC will be soft for a bit. This is the same case for transportation softness. I think automotive, with the expansion of EVs, is continuing to be relatively stable. [The EV market] is not as we all read. It hasn’t grown as fast as we expected. However, it is stable and consistent.”
MetalMiner’s monthly free MMI report gives monthly price trends for 10 different metal areas, including copper, stainless, aluminum and precious metals. Sign up here!
What was the most recent U.S. accomplishment for Norsk Hydro?
“Cassapolios, we stated that at the end of the year. First green field plant hydro built in the past 20 years.”
“On the extrusion side, [there are] several significant projects, such as the Cressona, PA plant, which is going on an expansion now. We’ve also got Dalles, Oregon which happened last year and is now ramping. It has about 25,000 tons worth of capacity coming online for recycled aluminum products. In the case of Cressona, that is matched with large extrusion projects coming online this summer, which will help us, and then another press in California is also coming online this summer. So, we have four major projects coming online.”
Does Hydro expect demand pickup this year or next? If so, from what?
“I think the view collectively is that it will stay flat, for the moment. Last year, there was a slight uptick possibility. But for the current Q1 and Q2 production rates, it should stay flat. I don’t see much movement in the near term, as you’ve seen with the Fed holding on interest rates. I suspect there is continued labor market stress, which doesn’t help inflation. I don’t think we will see much changes for the remainder of 2024, or early 2025.”
Has Hydro found any pushback from buyers on low-carbon aluminum, considering the price?
“If you look at what we see globally, low-carbon aluminum demand is the strongest growth in aluminum of all – greener products. We continue to be bullish on the opportunity. When you talk to customers, I would say that the reaction is varied. Despite this, for those customers who are delivering into consumer facing segments, they understand that this material is not available everywhere in the market. So they understand it meets a valued need they need toward their consumer, and they understand that it comes at a cost. So it’s not something every customer of ours is eager to pay, like any premium product. However, we do still see a willingness to pay, especially for companies with sustainability goals.”
Are you under increasing pressure to generate aluminum savings, especially with recent price increases? Make sure you are following these 5 best practices.
