Hydro confirms permanent shutdown of its Birtley extrusion plant, cites challenging market conditions

Amid challenging market headwinds, Hydro has announced the permanent closure of its Birtley extrusion plant in the United Kingdom. The Norwegian aluminium giant cited a sharp drop in demand and tightening recycling margins across the downstream aluminium sector as key drivers behind the decision.

The plant, a longstanding part of Hydro's UK operations, is set to cease operations by the end of May, marking a significant shift in the company's regional footprint. The decision follows a detailed consultation process with employees and their representatives.

The closure will result in approximately 100 redundancies. Hydro has expressed a strong commitment to supporting affected employees, including offering roles at its other UK sites and providing transition assistance for those leaving the company.

As per BBC, many economists and politicians are increasingly worried about the sluggish pace of growth in the UK economy. Although the UK economy grew more than expected in the first quarter of 2025, analysts caution that the disruption and uncertainty caused by the US trade tariffs, which started in April, could slow growth in the latter part of the year. This comes despite a recent agreement with the US that reduced or removed tariffs on certain UK exports, including cars, steel, and aluminium.

Hydro, in their financial report, had already warned of more closures in the near future, stating, "Ongoing weak market activity continues to tighten aluminium scrap supply, pressuring recycling margins and reducing re-melt production in Hydro Extrusions and aluminium metal recycling."

If we analyse Hydro's Q1 2025 results, though the company delivered a strong performance, the adjusted EBIDTA from Hydro Extrusions dropped 18 per cent Y-o-Y to NOK 1,174 million, down from NOK 1,437 million in Q1 2024. Despite a sharp 216 per cent rebound from the previous quarter's NOK 371 million, the broader trend remains concerning.

Also Read: What is causing the closure of two Hydro sites?

Production and customer orders previously handled at Birtley will now be absorbed by Hydro's extrusion facilities in Tibshelf and Cheltenham, ensuring continued service to UK customers without interruption. The move is expected to strengthen Hydro's UK supply chain while aligning with its long-term sustainability and efficiency goals.

The company noted that persistently weak market activity has led to a tightening of aluminium scrap availability, putting pressure on recycling margins and forcing a reduction in remelt production across its Hydro Extrusions and Aluminium Metal Recycling divisions.