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Norsk Hydro Shares Fall On Closure Of World's Largest Alumina Refinery

Norsk Hydro Shares Fall On Closure Of World's Largest Alumina Refinery
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Norsk Hydro (OTC: NHYDY) has closed its alumina refinery plant in Brazil, according to CNBC. 

“It was running at 50 percent capacity, but will now be fully curtailed," a BMO Capital Markets analyst told Benzinga. "That will likely put upward pressure on alumina prices globally. Century Aluminum Co (NASDAQ: CENX) is short alumina, while Alcoa Corp (NYSE: AA) is long alumina."

What Happened

The company will halt production at the world’s largest alumina refinery, which has been in the midst of an environmental dispute since March. This closure strongly affects aluminum output and other company facilities around the world, according to Norsk Hydro

"While it is too early to determine the full impact, the decision to close Alunorte and Paragominas will have significant operational and financial consequences, potentially also for Hydro's primary aluminum portfolio, including Albras," the company said in a statement.

Why It’s Important

This particular refinery produced over 6 million tons of alumina in 2017, representing roughly 10 percent of global production, CNBC said. A partial shutdown earlier in 2018 was triggered after Norsk Hydro conceded that it had made unlicensed emissions at the facility, the cable news network said.

Shares of American competitor Alcoa were trading up slightly at $22.20 at the time of publication Wednesday. Norsk Hydro shares were down 12.23 percent at $5.34. 

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Posted-In: BMO Capital Markets CNBCAnalyst Color News Top Stories Exclusives Analyst Ratings Media Best of Benzinga


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