Hydro CFO on Tariffs, Global Supply Chains, and Auto Demand

Impact of Tariffs on Aluminum Prices

• 📈 Tariff changes, particularly the 50% duty, have significantly impacted the US aluminum market, leading to a massive increase in aluminum prices.
• 💡 While Hydro's metal price is a pass-through cost, the increased aluminum cost is being passed on to customers and ultimately the end consumer.
• ⚠️ This price increase raises concerns about the competitiveness of aluminum and its long-term demand in the US.

Global Supply Chain Reshuffling

• 🌍 Tariffs and trade uncertainty are causing a significant reshuffle of global supply chains and production capacity.
• 🔄 Companies are optimizing operations around tariffs, leading to changes in global supply chains and creating market uncertainty.

Softening Demand in the Automotive Industry

• 🚗 Demand from the automotive industry has been softening across the US, China, and Europe compared to the previous year.
• 📉 While not a sharp decline, there is a noticeable softening of demand from automakers.
• 🌐 This softening is attributed to uncertainty surrounding tariffs and the resulting global supply chain adjustments.

Hydro's Operations and Outlook

• 🇺🇸 Hydro has substantial operations in the US, with over 6,000 employees in the aluminum value chain, and most of its US market supply is produced domestically.
• ⏸️ The company has postponed its anticipated market recovery for the second half of the year due to current market uncertainties, impacting potential capex investments.
• 🤝 Hydro remains committed to producing for its customers despite the challenging market conditions.