Norsk Hydro cuts 2016 global aluminium demand forecast

Norsk Hydro, one of the world's largest aluminium producers, cut its 2016 forecast for aluminium global demand, including China, to 3-4 per cent from 4-5 per cent previously, as it reported quarterly earnings that beat forecasts on Wednesday.

Prices of aluminium - used in the aerospace, construction and automotive sectors - have been hit by concerns about oversupply, compounded by worries over a Chinese economic slowdown.

The LME benchmark three-month aluminium is down around 16 per cent over the past 12 months and was trading around $1,520 on Wednesday.

"For 2016, global primary aluminium demand is expected to increase by 3-4 percent," the firm said in a statement, adding nevertheless that market conditions had brightened. "Following several years of challenging market conditions, the global aluminium market has improved with substantially higher all-in metal prices together with a better demand and supply balance for primary aluminium."

In the fourth quarter the firm posted an underlying operating profit of 1.57 billion crowns ($182.14 million), down from 2.89 billion in the year-ago period, beating forecasts for 1.33 billion crowns in a Reuters poll of analysts.

For the first quarter of 2016, Norsk Hydro said it had sold around half of its expected primary aluminium production at a price of around $1,500 per tonne.

($1 = 8.6197 Norwegian crowns)