Demand for most metal products (extrusion ingot, sheet ingot, foundry alloys and wire rod) in Europe weakened during the year. North American demand was stronger in general. Demand for foundry alloys continued to be strong in Northern Europe and in Germany in particular, and also improved in Asia. Annualized production of primary aluminium was relatively stable in the final quarter of 2011 amounting to 26.6 million mt. Annualized consumption declined, however, to 24.7 million mt. Recent announcements of smelter closures and limited new capacity coming on stream are expected to improve the supply demand balance in 2012. Demand for primary aluminium is expected to grow by about 3-5 percent in 2012. However, market sentiment continues to be influenced by significant economic uncertainty.
European demand for downstream products was somewhat higher compared to 2010 as most markets continued to recover in the first half of 2011. However, demand weakened in the second half of 2011 due to increasing economic uncertainty in Europe and in Southern Europe in particular. Economic and market developments for 2012 are uncertain with low visibility. However, certain leading indicators are positive for rolled products. European demand for extruded aluminium products is expected to decline in 2012 with the building and construction market continuing to be the weakest end use market segment. Outside of Europe, the market outlook is positive, and within the automotive and transport segments in particular.
Power production in Norway amounted to 127 TWh, which is 3 TWh higher than 2010. Hydro's water reservoirs were well above normal at the end of 2011 and snow reservoirs increased significantly. As a result, production is expected to be high through the first quarter of 2012.
