Norsk Hydro: Hydro invests NOK 1.65 billion to supply Europe’s electric infrastructure with low-carbon aluminium
Rhea-AI Summary
Norsk Hydro (NHYDY) announces a NOK 1.65 billion investment to construct a new wire rod casthouse at its Karmøy, Norway aluminium smelter. The facility, scheduled to begin operations in Q1 2028, will have an annual capacity of 110,000 tonnes and produce aluminium wire for European power cables.
This marks Hydro's largest Norwegian investment in a decade, aimed at supporting Europe's energy infrastructure development. The project will enhance the company's ability to supply low-carbon aluminium solutions, with Norway currently providing 40% of Europe's aluminium production.
Despite generally weaker market conditions in 2024, Hydro reports increased sales of low-carbon and recycled aluminium compared to 2023 and 2022. The investment is part of Hydro's annual NOK 15 billion investment plan, with the final build decision expected in Q4 2025.
Positive
- Major NOK 1.65 billion investment in production capacity expansion
- Strong sales growth in low-carbon and recycled aluminium despite market weakness
- Strategic positioning in growing European energy infrastructure market
- Product portfolio diversification to address market volatility
Negative
- Final build decision pending until Q4 2025
- Current weak market conditions and reduced aluminium demand
- Challenging automotive and building systems markets
News Market Reaction
On the day this news was published, NHYDY declined 0.78%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Aluminium and renewable energy company Hydro is investing in building a new wire rod casthouse at its aluminium smelter in Karmøy, Norway. The new facility will supply aluminium for use in critical energy infrastructure in Europe and is expected to start production in 2028.
“This investment will expand the capacity of wire rod to supply our customers with low-carbon solutions needed to develop and expand Europe's most critical infrastructure. This demonstrates that a productive aluminium industry has good growth opportunities in Norway,” says Eivind Kallevik, President and CEO of Hydro.
The wire rod casthouse in Karmøy will have a capacity of 110,000 tonnes per year. Completion of the casthouse is scheduled for the first quarter of 2028 and is Hydro's largest investment in Norway in ten years.
The new casthouse will produce aluminium wire for power cables in Europe. Aluminium is defined by the EU as a critical material. Norway currently accounts for 40 percent of the aluminium produced in Europe.
“Europe's energy transition is about one thing, more renewable power production, and the power produced must be transported over long distances. Aluminium is crucial for transporting electricity to where it is needed. By expanding the capacity to deliver low-carbon aluminium from Norway to the EU, we help ensure that the infrastructure, the very backbone of the future energy system, supports both Europe's security and climate policy goals," says Kallevik.
Increased demand for low-carbon aluminium
While a turbulent global landscape and lower industrial activity has reduced aluminium demand over the past year, Hydro has sold more low-carbon aluminium in recent years. In the energy transition, properties such as weight, durability and recyclability give aluminium a competitive advantage. An aluminium conductor with the same electrical conductivity as a copper conductor weighs approximately 50 percent less, or half the weight, of a copper conductor.
“We see in our own sales figures an increasing awareness in the market that future renewable energy must be transported with renewable materials. Despite generally weaker demand in 2024, Hydro sold more low-carbon and recycled aluminium last year than in both 2023 and our record year in 2022,” says Kallevik.
The new casthouse will contribute to increased product flexibility in a volatile aluminium market, where the markets for automotive and building systems are particularly challenging. With a new wire rod casthouse, Hydro can produce more aluminium wire for a rapidly growing market.
“Europe's transition from imported fossil energy to domestically produced renewable power opens an exciting market when the infrastructure behind the electrification wave is to be built. Our ambition is for Hydro to play a key role as a stable, reliable supplier of the aluminium solutions Europe needs to succeed,” says Kallevik.
The project is pending final build decision which will be made in the fourth quarter of 2025. The investment is included in Hydro’s annual investment plans of approximately NOK 15 billion.
Investor contact:
Elitsa Blessi
+47 91775472
Elitsa.Blessi@hydro.com
Media contact:
Anders Vindegg
+47 93864271
Anders.Vindegg@hydro.com
FAQ
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