Hydro CEO says aluminium market balance depends on China cuts

The outcome of Chinese discussions to cut the country's aluminium output will be key to determining the global price of the light-weight metal, the head of Norwegian producer Norsk Hydro told Reuters on Thursday. Aluminium prices have dropped by nearly 50 percent since 2011 to $1,459 per tonne.

"The economic growth in China is on its way down while (aluminium) production capacity is building up," Hydro Chief Executive Svein Richard Brandtzaeg said on the sidelines of a business conference.

Chinese data due out in the coming days are expected to show a continued slowdown in the world's second-largest economy, forecasts show. After rising slightly towards the end of 2015, the price of aluminium has again fallen at the start of the new year.

"It's difficult to tell how long this will continue and depends on what actions China will take. There are signals that Chinese producers are discussing the situation, it remains to see the outcome of this," Brandtzaeg said.

At the same time he remained confident of Hydro's ability to compete, pointing to the sharp weakening of Norway's crown currency as a key factor for the firm.

"We have costs in Norwegian crowns and are selling in U.S. dollars. Relatively speaking it makes us a bit more optimistic. We've also established ourselves in a very competitive part of the cost curve and will make sure to uphold that going forward," Braendtzaeg said.