Hydro grows postconsumer scrap use in 2024

According to its 2024 integrated annual report, Norway-based Norsk Hydro SA increased its use of postconsumer scrap to 451,000 metric tons in 2024 from 444,000 in 2023.

The company says it delivered solid results in 2024, “carried by its upstream operations with positive revenue drivers and strong performance, despite challenging markets in Europe and North America.”

Hydro launched its 2030 strategy in late 2023 to grow in aluminum recycling, extrusions and renewable power generation and says it will execute on its decarbonization road map. “Hydro has a solid foundation to capture the long-term value creation opportunities in the aluminum market, and Hydro's value chain presents a unique advantage in navigating volatile markets,” the company states in its annual report. “To accelerate and elevate Hydro's position as the leading provider of low-carbon, high-value aluminum solutions, the company is sharpening its strategic capital allocation and launched a new, 6.5 billion improvement program aimed at 2030 and pushing forward profitable growth throughout the aluminum value chain.”

Hydro says 2024 was characterized by increasing geopolitical tensions and unpredictability. Despite those challenging market conditions, Hydro adds that it is strengthening its position in the market.

“We are committed to execute on our strategy. Important milestones driving the green aluminum transition have been reached in all parts of the company in 2024, and we are well-positioned to reach our ambitions for 2030,” Eivind Kallevik, president and CEO of Hydro, writes in his letter to stakeholders in the “Integrated annual report 2024.”

“Since late 2023, recycling margins have been under pressure driven by both weak end-product demand combined with tight scrap markets driven by low economic activity in key segments for scrap generation. Despite short-term challenges, our conviction in the long-term opportunities remains unchanged. We expect growing demand for more sustainable materials, and we see that many customers increasingly value both reliability and responsible value chains,” he adds.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, for 2024 totaled 26,318 million Norwegian kroner ($2.4 billion) compared with 22,258 million Norwegian kroner (nearly $2 billion) in 2023. Higher alumina prices, lower raw material costs and positive currency effects were offset in part by lower extrusions and recycling volumes and higher fixed costs, the company says.

Hydro had an adjusted RoaCE, or return on average capital employed, of 12 percent over the last five years, above its target of 10 percent over the cycle. Reflecting the current volatile market environment, and a year with high growth and return-seeking investments, the adjusted RoaCE for 2024 was 8.5 percent, according to the company.

The company has delivered 10.1 billion Norwegian kroner ($905.5 million) from improvement programs since 2018, surpassing the 9.5 billion Norwegian kroner ($851.5 million) target set last year. Commercial initiatives have generated 2.6 billion Norwegian kroner ($233.1 million) in value. These initiatives and improvement programs enhance Hydro’s competitive edge and support earnings resilience across economic cycles.

The company says it has reached the 2025 decarbonization targets already as well as key milestones on its path to its 2030 and 2050 targets. Multiple initiatives are being pursued to reduce greenhouse gas emissions within smelting, casting and recycling. Demand for sustainable materials are growing, and partnerships help to position and accelerate greener earnings uplift.

Aluminum demand is set to increase significantly toward 2050, driven by the green transition, Hydro says. This creates opportunities for Hydro's low-carbon and recycled products.

“End-consumers are increasingly concerned about the embedded emissions of the products they purchase,” Kallevik writes. “As a result, our customers are responding by shifting their attention towards how aluminum is produced. We expect demand for low-carbon aluminum to outpace overall market demand towards 2030. Our close cooperation with our customers ensures we stay aligned with evolving demand, supported by a decarbonization agenda which is already delivering results. We also work closely with industry associations to ensure standardization and continuous improvements across the whole industry. Collaborating with customers to develop an early market for our leading products is a crucial element of our strategy. Over the past years, we have entered into strategic partnerships with some of the world’s leading companies. And in 2024 we have made big steps towards increasing partnerships.” 

Those partnerships include Brompton, which launched its line of city bikes with wheel rims made entirely from postconsumer aluminum scrap in the form of Hydro Circal 100R.