Hydro cites recycling as 2024 growth driver

Norway-based Norsk Hydro ASA reports that sales of its low-emissions Hydro Reduxa and high-recycled-content Hydro Circal aluminum will increase by more than 20 percent this year despite what it says are weak European and North American markets.

In information prepared for its Capital Markets Day in late November, the energy and metals firm says the two product lines are “building capabilities for future contributions with partners” in decarbonization efforts.

Hydro says it remains on track to undertake about $1.35 billion in capital expenditures in 2025 and the medium term, including improvement efforts to strengthen operations in its Recycling and Extrusions business units through 2030.

The company remains confident in the long-term value and role of its recycling operations in meeting the growing demand for low-carbon products, despite short-term pressures in the recycling market with tighter scrap supply and softer aluminum demand.

Hydro says its expertise in sourcing and processing complex scrap types positions the recycling business unit for profitable growth. In 2024, the company says it is on track to consume 700,000 metric tons of postconsumer scrap.

Additional investments approved and planned mean the lower end of the company’s 2030 annual postconsumer scrap consumption target of from 850,000 to 1.2 million metric tons is within reach.

The company says recycling activities in its Recycling, Aluminium Metal and Extrusions business units combined are positioned to reduce its hot metal costs by $20 to $30 per metric ton by 2030.

“When markets normalize, uplifts from invested and announced growth initiatives, hot metal cost improvements and Alumetal synergies are projected to deliver more than $450 million in annual recycling earnings," Hydro says, citing a "current cyclical downturn."

Hydro says its Hydro Extrusions business unit offers “significant potential" for profitable earnings uplift despite current market challenges by modernizing and optimizing the global Extrusions network through automation, operational enhancements and strategic investments in fabrication and press consolidation.

In the near term, however, Hydro's Extrusions segment will remain profitable next year but is expected to face continued weak demand and pressure on recycling margins affecting 2025 results.

”Our 2030 strategy is clear and we are steadily delivering on our ambition to pioneer the green aluminum transition,” Hydro President and CEO Eivind Kallevik says.

“We are driving growth in aluminum recycling, extrusions and renewable energy, further supported by our commitment to a broader sustainability agenda. We are making Hydro well-positioned to create value and capture new market opportunities as the green transition progresses.”