Hydro Plans to Shut Down Loss-Making Remelting Aluminum Capacity

Norsk Hydro ASA (NHY), Europe’s third- largest aluminum maker, is cutting capacity at plants where it uses third-party metal to make orders for the auto and building industries after suffering losses.

The company will shut 35,000 metric tons of remelting capacity at its Sunndal plant in Norway and is considering plans to curtail about 120,000 tons of capacity at its Aardal plant, company spokesman Halvor Molland said by phone today. It will increase primary aluminum production at Sunndal.

Hydro, which is seeking to reduce the cost of aluminum production by $300 a ton, has been cutting production at non- profitable plants this year. In July, the company said it would close its 180,000 ton-capacity Kurri Kurri smelter in Australia.

Hydro began talks with unions and management at Aardal about cutting remelting output at the end of June, according to Molland. No decision has yet been reached about the timing.

Hydro, which last year restarted 15,000 tons of the 100,000 ton-primary aluminum output curtailed at Sunndal in 2009, will add 35,000 tons of production capacity at the plant from the end of August through to the end of October, Molland said. The cut in the remelting operations is planned to take place in the same period, he said. Hydro plans to start the remaining 50,000 tons at some point, he said.

To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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