NORSK Hydro warned that it sees growth in global aluminium demand slowing next year as a result of economic turbulence that is creating a weak market and pushing many industry players into the red.
Hydro, one of the world’s top aluminium producers, said it saw demand for primary aluminium outside China rising between three and five per cent in 2012, after total demand growth slowed to seven per cent in 2011 from a 19 per cent rise a year earlier.
Europe’s sovereign debt crisis has curbed aluminium demand on parts of the continent and it could take some time before demand improves, the firm’s chief executive Svein Richard Brandtzaeg said at a capital markets event yesterday.
“In Europe, the uncertainty relating to the sovereign debt crisis has impacted our customers,” he said. “It may take some time before we can see improvement in Europe.”
The aluminium sector has been especially weak in the fourth quarter as customers cut inventories amid the economic turmoil.
However, Chinese producers are rumoured to have curtailed yearly production by about 1.5m tonnes.
Aluminium prices have dipped in recent months with the London Metal Exchange (LME) three-months aluminium price down to $2,100 a tonne from its peak of $2,800 in May.
City A.M. Reporter