Reuters reported that Norwegian aluminium producer Norsk Hydro had ramped up its cost saving programme and saw increased global demand this year while warning of technical delays at its new smeltng plant in Qatar.
Shares in Norsk Hyrdo fell 1.6 percent in early trading as analysts expressed concern about a potential eight-week delay at the Qatalum smelter and noted that Norsk Hydro's market growth estimate for the coming year is lower than recent guidance from U.S. rival Alcoa.
The company said in a statement published ahead of a day of briefings for analysts and investors in Oslo "Hydro has accelerated the USD 300 per tonne improvement program which is now expected to be achieved in 2013, a year earlier than previously indicated. It said it had realized savings of USD 50 per tonne and targeted a further USD 125 per tonne for 2011. Hydro launched its first efficiency push in the autumn of 2009.”
The firm said it saw aluminium demand growing about 7% this year and 3% to 6% in 2012, adding it expected an improved supply and demand balance. It said demand for primary aluminium increased by 19% in 2010 in the world outside China.
Hydro also said technical problems at its new Qatalum smelter in Qatar a 50/50 venture between Qatar Petroleum and the Norwegian aluminium firm could delay full production by eight weeks. The smelter ramp-up is now at 50 percent and is expected to reach 100% by June 2011. The previous estimate was for full production by the end of the first quarter.
Mr Morten Normann Nordea Markets analyst said the report was slightly bearish for Hydro. He said that "The overall impression is on the negative side. It's good that they are ahead on cost cuts, but the Qatalum delay may be affecting them more negatively, even if its only eight weeks."
Mr Henrik Schultz analyst at Argo Securities said Hydro's comments were on the whole neutral. He said that "What strikes me immediately is that Hydro is guiding slightly lower demand volumes than for example Alcoa. But these are after all just indications."
Mr Schultz said "What's more important is perhaps that they are now talking about a more balanced market situation in 2011 and I quite agree."
（Sourced from Reuters）
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