Norsk Hydro Signals Alarm Over Construction Sector Downturn

Norsk Hydro, a leading aluminum producer, has raised concerns about a significant slump in the construction sector within some of Europe's major economies, drawing parallels to the downturn experienced during the Covid-19 crisis, according to a report by the Financial Times. Pal Kildemo, the company's Chief Financial Officer, highlighted the adverse effects of high interest rates and escalating building costs on the demand for aluminum. In specific countries and regions, the company has observed a dramatic drop in building and construction demand, with reductions reaching up to 50% year-over-year.

Kildemo expressed skepticism regarding a near-term recovery in aluminum demand, dismissing the likelihood of an upturn in the first half of the year. He further cautioned that a rebound in the latter half remains uncertain, especially if interest rates continue to hover at elevated levels. This outlook underscores the broader challenges faced by the aluminum sector amid fluctuating economic conditions and the construction industry's pivotal role in driving demand for this essential metal.