Norsk Hydro ASA announced on Tuesday that its Alunorte alumina refinery in Brazil has reduced output to 50% of capacity due to reduced natural gas supply. According to reports from CNBC TV18 and Business Standard, the Norwegian company implemented contingency measures including purchasing spot gas volumes and requesting direct access to the Barcarena LNG receiving and regasification terminal. The Alunorte plant, located in the northern state of Pará, has capacity to produce 6.3 million metric tons of alumina per year, making this a significant disruption to global supply chains. The global alumina market is currently in a 1.6 MT surplus in 2026 and 0.5 MT surplus in 2027, with the capacity cut being positive for alumina prices.
As reported by Kitco Metals, Hydro estimates the financial impact in the third quarter from reduced production and purchasing gas at prices above the contracted rate could be around $75 million to $100 million. The company stated that Alunorte will begin ramping up production to full capacity once gas availability normalises. The sharp reduction in output is attributed to disruptions in gas supply availability by the company's gas supplier, CELBA. However, the recovery timeline remains uncertain as CELBA is owned by New Fortress Energy, a heavily indebted firm currently undergoing a complex financial restructuring.
According to CNBC TV18 and Business Standard, alumina prices are now 10% of aluminium, compared to the average of 14% to 16%, following the Brazilian disruption. The impact is expected to be broadly positive for Indian aluminium producers, as the Brazil disruption could tighten global alumina supply and push aluminium prices higher. Three-month aluminium on the London Metal Exchange rose as much as 2% on Tuesday to $3,382.50 a tonne, its highest level since June 22. Aluminium prices have already moved to a seven-week high following the news of the Brazilian disruption, with the immediate trigger being an alumina supply disruption. The rally has been further supported by multi-decade low LME inventories and disrupted Middle East shipments.
As reported by CNBC TV18 and Business Standard, shares of aluminium companies NALCO, Hindalco Industries as well as Vedanta Aluminium are expected to be in the spotlight on Wednesday, August 12. The positive impact is attributed to the fact that less global supply can push up alumina and aluminium prices, with higher aluminium prices generally meaning Indian producers can sell their metal at better prices, potentially boosting revenue and margins. NALCO shares are up as much as 9% and are among the top performers on the Nifty 500 index, while Hindalco is trading 3.5% higher. NALCO shares jumped 7.84% to ₹418.3 in morning trade, making the stock the top gainer on the Nifty Midcap 100, while Hindalco Industries rose 3.49% to ₹1,085.75 and was the top gainer on the Nifty 50. NALCO shares are trading 8% higher at ₹419.35 and are up 33% so far this year.
According to Business Standard, NALCO recorded its highest-ever Q1 calcined alumina production at 5.77 lakh tonnes while sales volume of alumina/hydrate stood at 3.47 lakh tonnes in Q1 FY27. Hindalco Industries' Utkal Alumina refinery recorded production volume of 654 kilotons in the June 2026 quarter, while Vedanta Aluminium Metal had reported alumina production volumes of 826 kilotons for the first quarter of FY27. Higher alumina prices are particularly beneficial for NALCO as it contributed 27% of its financial year 2026 EBIT and 44% in financial year 2025. NALCO shares are now nearly ₹27 away from crossing its 52-week high of ₹445.10 and have risen significantly with over 142% gains from its 52-week low of ₹183.85. NALCO is scheduled to deliver final dividend of ₹1 for this month, with the company fixing August 24 as the record date to identify eligible shareholders.
