Norsk Hydro Halts Half of Alunorte Production Amid Brazilian Gas Supply Woes

Norsk Hydro has announced it is halving production at its Alunorte alumina refinery in Brazil due to supply difficulties with natural gas deliveries from CELBA. The disruption affects a central asset in the group's upstream aluminium production chain.

The company attributes the cut to CELBA's inability to source gas at market conditions compatible with its current financial situation. This comes amid broader tensions across gas markets, illustrated by the rise in France's benchmark gas price and Europe's vigilance over gas storage levels ahead of winter.

Alunorte's nominal capacity reaches 6.3 million tonnes of alumina per year, making it a crucial link in Hydro's aluminium production chain. The site uses natural gas in its refining process, replacing heavy fuel oil, which was introduced in recent years as part of the company's efforts to improve efficiency.

Hydro estimates the potential financial impact of the disruption at between $75 million and $100 million on its third-quarter accounts. The production cut is expected to affect a link located upstream in aluminium metallurgy, ahead of the electrolysis and casting stages.