Norsk Hydro
Note: This is a daily stock update and the information stands true as of 16/09/25, 09:00 CET.
Company Update:
Expert Opinion:
Despite Norsk Hydro's recent strong run, we still see a significant upside due to the fundamentals of the company. Aluminum benefits from strong prospects over the long term and Norsk Hydro is best placed to benefit from these sound fundamentals. Access to scrap aluminum is key and the battle in Europe highlights the strong underlying demand. Norsk still trades at an attractive valuation (PE25 at 9.8x and PE26 at 87x). This is one of our analyst's favorite play in the sector and one that should definitely be on your radar (if not already in your book).
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
Company Update:
There’s a long piece in today’s FT explaining the pricing buzz in aluminum markets. Besides (cost- and/or overcapacity-induced) supply restraint (more so from China), imposition of very high US tariffs on the white metal (unlike copper) has resulted in record-low inventories and sky-high premia. This isn’t a surprise, as aluminum – a preferred base metal at AlphaValue, other than zinc – was long due for a price uptick.
There is also an interesting article in the French newspaper Les Echos on our access to scrap aluminum in Europe. Indeed, while there is a 50% tariff on aluminum, there is none on scrap aluminum. Therefore there is a risk that US players come to Europe and buy crap aluminum to recycle it in the US to skip the 50% tariff. The European business would be penalized twice against US players. Exports of scrap aluminum are up 200% YTD. European players and Norsk Hydro notably demand a tax to protect scrap metals in Europe. While this is a long-term risk, in our view it essentially highlights the strong dynamics of demand for the moment.
This is good news for the likes of Norsk Hydro (best proxy) - already above its pre-tariff levels, South32 (a turnaround story) and Rio Tinto (well-diversified). Thinking at an extreme, given that Russian metals are moving at ease towards China, revival of Rusal (irrespective of peace in Ukraine) also seems probable.
Despite Norsk Hydro's recent strong run, we still see a significant upside due to the fundamentals of the company. Aluminum benefits from strong prospects over the long term and Norsk Hydro is best placed to benefit from these sound fundamentals. Access to scrap aluminum is key and the battle in Europe highlights the strong underlying demand. Norsk still trades at an attractive valuation (PE25 at 9.8x and PE26 at 87x). This is one of our analyst's favorite play in the sector and one that should definitely be on your radar (if not already in your book).
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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