Hydro’s primary aluminum production continues to run normally, while temporary stoppages are reported only in North American and European extruded operations.
Still early to estimate an exact operational and financial impact. On Tuesday, Norsk Hydro, the world’s largest integrated aluminum producer, was subject to a cyber-attack impacting operations in several of the company’s units. In an update this morning, the company said there was not yet a full overview of the timeline toward resuming full normal operations, but “Most operations are running, ensuring deliveries to customers according to specifications…”
Primary aluminum and alumina/bauxite operations continue to be described as “running as normal” with more manual operations than usual.
Temporary stoppages were reported only in extruded operations. On a press conference this afternoon, CFO Eivind Kallevik confirmed they are “still experiencing some stoppages within extruded solutions in Europe as well as in the US, but we are then planning to restart some of the production systems during today enabling us to pull the customer data and the orders that we have, so we can fulfill them in the days to come.”
Rolling operations facing only a limited impact. Hydro stated that its Rolled Products unit experienced “limited operational impact” and expects to restart certain systems today that “would allow for continued deliveries to customers.”
No impact seen in shipments for now. Asked about the impact on shipments, the company’s CFO added that “so far we are delivering according to plan, we will access more of the production systems today, […] that will give us more days of visibility in terms of supplies of material to our customers…”
BACKGROUND.
Hydro is the world’s largest producer of aluminum extrusions, reporting in 2018 external sales of 1.40 million mton, with about one-half coming from more than 17 facilities in North America (USA, Canada and Mexico); in addition to a significant presence around Europe (facilities in Belgium, Denmark, Estonia, France, Germany, Hungary, Italy, Lithuania, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spain, Sweden, and the UK) and South America (Argentina and Brazil).
Hydro is also one of the world’s largest producers of aluminum rolled products,with external sales in 2018 of 0.95 million mton, produced mainly in Germany (83%) and Norway (17%). This includes Hydro’s 50% stake of Alunorf, in the world’s largest aluminum rolling and casting plant, in Neuss, Germany.
Impact on LME prices. At face value, the cyber-attack’s impact would be (if anything) bearish for LME prices and billet spot premiums, given the potentially adverse impact on Hydro‘s downstream operations (which could temporarily reduce demand for primary/secondary aluminum).