On Thursday, Kepler Cheuvreux resumed coverage on Norsk Hydro (OTC:NHYDY) SA shares with a Buy rating and a price target set at NOK 88.00. The firm’s analyst, Martin Granviken, provided insights into the aluminium market, noting its cyclical nature and how prices are influenced by the global supply-demand balance. Recent market reports suggest an impending aluminium supply deficit due to Chinese production approaching its capacity limit, which is expected to push aluminium prices higher over the next three years.
Granviken pointed out that alumina prices have hit record levels in the last quarter and market projections, along with futures curves, indicate that aluminium prices are likely to stay higher than historical averages. This trend positions Norsk Hydro favorably as the company is set to benefit from these market conditions.
The analyst also highlighted the strategic importance of aluminium as a material in the energy transition, emphasizing its long-term structural demand. According to Granviken, Norsk Hydro’s involvement in both upstream and downstream segments of aluminium production places it at an advantage to capitalize on the growing demand for this metal, which is increasingly used in a variety of green technologies and applications.
Norsk Hydro, with its operations spanning the entire value chain from bauxite extraction to the production of rolled and extruded aluminium products and solutions, is therefore seen as well-equipped to navigate the evolving market landscape.
The Kepler Cheuvreux analyst’s reinstatement of coverage and the optimistic outlook for Norsk Hydro come at a time when the industry is poised for growth, driven by both cyclical factors and the broader transition towards sustainable energy solutions.
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