LONDON, July 27 -- Demand for aluminum in Norsk Hydro's (NHY.OS) main upstream and downstream markets is expected to grow a combined 12% in 2010, the Norwegian producer said Tuesday.
According to Hydro, demand for metal products--extrusion ingot, sheet ingot, foundry alloys and wire rod--during the second quarter continued above levels experienced in the same quarter of last year.
Consumption in the European flat rolled products market improved by 5% from year-ago levels, Hydro said.
"Order levels have remained firm, reflecting growth in end-use demand compared to 2009," the company added.
Demand in the North American market was meanwhile similar, Hydro noted, and is expected to be stable in the third quarter "but with a normal seasonal decline."
But the effect of customer restocking had a negative impact on European demand for extruded aluminum products, which fell slightly in the second quarter from the previous three months. The picture was in contrast to North America, which experienced a seasonal increase in demand compared with the first quarter of 2010 and the weak second quarter of 2009.
"The [North American] market appears to be improving following a long period of continuous decline," the company said. "Market demand in South America continued to be positive, mainly in Brazil," it added.
Hydro in May announced an agreement to take over the majority of Brazilian metals and mining company Vale's (VALE) aluminum business. The transaction is expected to close in the fourth quarter.