Its CEO Svein Richard Brandtzæg told a capital markets day that aluminium fundamentals remain promising due to the metal’s many positive qualities, including its light weight and recyclability.

He said world demand has grown strongly over the last two years, rising 9% in 2010 and around 7% in 2011. Growth outside China is expected to continue in 2012, although at a slower pace of around 3-5%.

He warned the current economic uncertainty has affected customer sentiment which has led to weaker prices and softer end-markets.

Hydro presented three scenarios for earnings potential based on different levels of aluminium prices and exchange rates, in all of which its EBITDA would remain significantly above capital expenditure required for its existing facilities.

Hydro said it was considering commercial opportunities and possibilities of growing its smelter portfolio.

Highlights of 2011 included its 600kt/y Qatalum smelter reaching full production in September 2011. The focus in 2012 will be on streamlining operations and achieving a cost level of US$1400-1500/t at 2010 market conditions.