Norsk Hydro is raising its aluminum demand growth forecast for this year, the Norwegian producer said Friday.
"We are raising our expected 2017 global primary demand growth outlook from 3-5% to 4-6%, and we expect a largely balanced global market," said Svein Richard Brandtzaeg, the company's president and CEO, in its first-quarter results statement.
Global primary aluminum consumption decreased 3.4% to 14.7 million mt in the first quarter compared to the fourth quarter of 2016, mainly due to seasonal effects with the Chinese New Year and customer destocking, Hydro said.
Compared with Q1 2016, however, global demand increased 5.9%.
Outside China, demand seasonally increased 1.9% in the first quarter from Q4 2016, while the year-on-year increase was 3.4%.
"Consumption outside China amounted to 7.1 million mt for the first quarter of 2017. Corresponding production amounted to 6.7 million mt, a decrease of 2.3% compared to the fourth quarter of 2016," Hydro said.
"Production outside China experienced a 0.8% increase compared to the first quarter of 2016, largely driven by ramp-up of new production capacity in India. Demand for primary aluminium outside China grew by around 3% in 2016, and is expected to grow by 2-4% in 2017," it said.
Compared with Q4 2016, Chinese aluminum consumption fell 7.9% to 7.6 million mt, due to seasonal effects, but was up 8.3% year on year.
"Corresponding aluminium production increased by 1.7% compared to the fourth quarter of 2016, and increased 16.6% compared to the first quarter of 2016," the company said.
Demand for primary aluminum in China is expected to grow by around 6-8% in 2017 and production is expected to increase by 10-12%. Hydro said.
Hydro produced 516,000 mt of primary aluminum in the first quarter, down 2% from 526,000 mt in Q4 2016 but up marginally from output of 514,000 mt in Q1 2016.
The company has sold forward around 50% of its expected primary aluminum production for Q2 2017 at around $1,875/mt.
Planned maintenance programs at the Paragominas and Alunorte units in Brazil reduced Hydro's bauxite and alumina production volume for the quarter, the company said.
Alumina production was off 7% from Q4 at 1.523 million mt, but up from 1.517 million mt in Q1 2016, while bauxite output stood at 2.4 million mt, down 22% from 3.063 million mt in Q4 and down 11% from 2.682 million mt in Q1 last year.
