Norsk Hydro Bracing for $210 Million Hit from Gas Supply Disruptions
Norsk Hydro (OTCMKTS: NHYDY) has warned of a potential financial loss of up to $210 million due to disruptions in natural gas supplies at its Alunorte refinery in Brazil. The company is currently purchasing gas at higher spot-market prices after its supplier, CELBA, failed to deliver contracted volumes since August.
The Norwegian firm estimates a $75 million to $100 million impact on its bauxite and alumina business in the third quarter, attributed to reduced production and elevated gas costs. It anticipates an additional $90 million to $110 million hit in the fourth quarter due to ongoing gas arbitrage expenses at Alunorte.
Alunorte had initially scaled back alumina production to 50% of capacity in August but resumed full operations after reaching a temporary agreement with CELBA. Hydro reassured that no further supply interruptions are expected and is collaborating with CELBA to secure a long-term solution.
The total financial impact remains uncertain and will depend on fluctuating gas prices, contractual developments, and progress toward resolving the issue.