(Adds quotes by CEO, analyst, share)
* Sees balanced aluminium market in 2013
* Sees global aluminium demand ex China up 2-4 pct in 2013
* Q1 underlying EBIT NOK 1.08 bln vs forecast 726 mln
* Shares rise 1.8 percent
OSLO, April 24 (Reuters) - Norsk Hydro, one of the world's biggest aluminium makers, beat first-quarter earnings forecasts due to higher prices, sales and cost cutting and predicted demand for the metal would return to levels that match supply this year.
Hydro said on Wednesday its underlying operating profit rose to 1.08 billion crowns ($184 million) from 578 million crowns at the same time last year, and against analysts' average forecast of 726 million crowns in a Reuters poll.
The company has been cutting costs in recent months to improve margins, after aluminium prices dipped to $1,830 in 2012 and demand for the metal was up just one percent.
Aluminium prices were trading around $1,913 a tonne on Wednesday, but prices remain low - analysts have said it would take levels above $2,500 for firms to add new capacity.
"Norsk Hydro is delivering on their cost-cutting programme and on their operations throughout the group: upstream and downstream operations are doing well," said Hans-Erik Jacobsen, an analyst at Swedbank First Securities.
"Relatively low aluminium prices are still an issue, something that will weigh Hydro's share price going forward, until we get a better market balance," he added.
Hydro's chief executive expects the latter to happen this year, despite increased uncertainty about the state of the global economy.
"The world economy is still gloomy and there are few signs that things will get better soon, so we must continue to get more out of less," chief executive Svein Richard Brandtzaeg told a news conference.
Despite that, Hydro maintained its view that global primary aluminium demand, excluding China, would be up by 2-4 percent this year.
Shares in Norsk Hydro were up 1.8 percent to 26.53 crowns at 0850 GMT, outperforming an Oslo benchmark index up 0.1 percent. (Reporting by Gwladys Fouche and Joachim Dagenborg; Writing by Gwladys Fouche; Editing by Mark Potter)