Hydro changes raw material sourcing for German rolling mills

Tue Sep 4, 2012 4:38am EDT

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Norwegian aluminium company Norsk Hydro ASA has decided to increase in-house primary metal sourcing, replacing less cost-efficient remelting of cold metal as a source for its Neuss-Grevenbroich rolling mills.

"The change in raw material mix will realize positive system effects for Hydro's German aluminium activities and is part of our ongoing optimization efforts and adaptation to challenging market conditions," said Executive Vice President Oliver Bell of Hydro's Rolled Products business areas.

In preparation for a ramp-up of primary sourcing in Neuss, planned for the first half 2013, Hydro has secured power contracts with Swedish energy group Vattenfall, totalling 2.2 TWh (250 MW) annually over five years. The power contracts are a combination of new and existing power arrangements, the latter adapted for supplying Neuss operation.

The primary production in Neuss is dedicated to source Hydro's rolled products business. The plant has sourced power on short-term basis since the previous long-term contract expired in end-2005.

"Improved framework conditions, including expected CO2 compensation in Germany, are giving relief to this efficient smelter. When the expected CO2 compensation is in place, we aim to resume some of the curtailed production in Neuss, increasing production to around 150,000 tonnes per year during the first half of 2013," Bell said.

Since March 2009, Neuss has operated at a lower production level of 50,000 tonnes per year, compared to a total production capacity at around 230,000 tonnes, in response to the weak global demand and prices for aluminium.

The smelter was integrated into Hydro's Rolled Products business area January 1, 2012. The integration has realized positive synergy-effects, and identified further potential. Ramping up production of primary metal will realize these positive system effects for Hydro's rolled products operations in the Neuss-Grevenbroich aluminium cluster. It will replace costly remelting of cold metal as source for rolled products.

The Neuss plant, 100 percent owned by Hydro, is located in western Germany, close to Düsseldorf.

Investor contact
Contact     Stian Hasle
Cellular    +47 97736022
E-mail      Stian.Hasle@hydro.com

Press contact
Contact     Halvor Molland
Cellular    +47 92979797
E-mail      Halvor.Molland@hydro.com
                                                      

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Source: Norsk Hydro via Thomson Reuters ONE

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