Business area outlook for Q3 2020 as provided in the Q2 2020 presentation:
Bauxite & Alumina
- Increased raw material costs from Q2 2020
- Alunorte production impacted by Paragominas power interruption and rescheduled maintenance
- ~ 60% of primary production for Q3 priced at USD 1,530 per mt
- ~ 55% of premiums affecting Q3 booked at USD ~260 per mt
- Q3 realized premium expected in the range of USD 175-225 per mt
- Reduced raw material costs and increased fixed costs from Q2
- Recycling facilities largely back to normal operations at end of Q2, but continued market uncertainty.
- Volatile trading and currency effects
- High market uncertainty, weak demand amid Covid-19
- High market uncertainty, but improving demand trend since April
- Volume and price uncertainty, high reservoir levels
- Average NO2 spot price ~15 NOK/MWh in July
- The latest available price and currency sensitivities for earnings (as well as information on the price time lags for revenues and costs), are included in the Q2 Investor presentation.
Publicly available information regarding the market prices and currency developments in Q3:
- The average LME-cash market rate in Q3 was 1,704 USD vs USD 1,493 in Q2. Realized price in PM lags LME spot with 1-2 months
- The average spot PAX alumina price in Q3 was USD 275 vs USD 244 in Q2. Alumina prices in B&A are realized with ca one month lag, in PM with 2-3 months lag
- The average USD/NOK market rate in Q3 was 9.13 vs 10.01 in Q2
- The average USD/BRL market rate in Q3 was 5.37 vs 5.38 in Q2
- The Nordpool power price for NO2 (where Hydro has ~2/3 of the production) in Q3 was NOK/MWh 52 vs 50 NOK/MWh in Q2
- The Nordpool power price for NO5 (where Hydro has ~1/3 of the production) in Q3 was NOK/MWh 50 vs 50 NOK/MWh in Q2
- The Nordpool power price for NO3 in Q3 was 67 NOK/MWh vs 62 NOK/MWh in Q2
We kindly remind you about our two-week silent period prior to the announcement date, starting on October 9.