Norsk Hydro Faces $210 Million Hit from Alunorte Gas Disruption

Norwegian aluminum producer Norsk Hydro faces a potential financial hit of up to $210 million due to disruptions in natural gas supplies at its Alunorte refinery in Brazil. The company revealed that it has been forced to purchase gas at higher spot-market prices since its supplier, CELBA, notified Alunorte in August of reduced gas availability.

The company estimates a $75 million to $100 million impact on its bauxite and alumina business in the third quarter, stemming from lower production and elevated gas costs. A further $90 million to $110 million hit is expected in the fourth quarter due to ongoing gas arbitrage costs.

Alunorte had temporarily reduced output to 50% capacity in August but has since resumed ramping up production following a temporary agreement with CELBA. The refinery does not anticipate further supply interruptions and is working closely with the supplier to find a long-term solution.

The ultimate financial impact remains uncertain and will depend on fluctuating gas prices, contractual developments, and progress toward resolving the supply issue.