Norsk Hydro plans a market slowdown in 2nd half
Posted by adminNorsk Hydro believes that the aluminum market may have reached its highest level this year in the second quarter and maintained its forecast of growth of 12% of its markets upstream and downstream in 2010.
The Norwegian producer of aluminum has made a profit before interest and taxes (EBIT) current of 1.1 billion kroner (137 million euros) in the second quarter, after losing 618 million kronor last year on same period. Analysts polled by Reuters had expected a profit of 900 million kroner.
"The numbers are very solid," said Samir Bendriss, an analyst with Pareto."They are particularly successful in the upstream activity, with higher prices, higher volumes and lower costs than expected."
The group assigns him, this performance to increase its volumes, the strength of its margins and tight control of costs.
"We still anticipate that demand in our major markets upstream and downstream will grow by about 12% in 2010," he said.
However, Norsk Hydro estimates that the global market for aluminum is oversupplied despite the recovery in demand linked to the moderate recovery of economic growth.
"There are many elements that suggest that the second quarter will be stronger in 2010", said group general manager, Svein Richard Brandtzaeg, at a press conference.
The group said world demand for primary aluminum, excluding China, has increased in the second quarter to an annualized level of consumption of around 24 million tonnes, while production outside of China increased 25 million tons on an annualized basis.
"Demand should be stable in the third quarter but with a normal seasonal decline," said Norsk Hydro.
The Norwegian group also warned that its results for its underlying activities of alumina (aluminum oxide) and raw materials are expected to fall in the second half after a solid six months, due to an expected drop courses alumina and rising costs of bauxite.
"The decline (will be) following the expected decline in margins," the group said.
Around 9:45 GMT, was virtually unchanged at 34.96 crowns.