The Norwegian aluminium giant Hydro has made drastic changes to their growth plan.
“We have downgraded demand growth in 2019 to minus 1-2 percent, so that is a fairly large downward adjustment, and we do not really see any improvement in 2020", says Hilde Merete Aasheim, CEO at Hydro.
Uncertainty surrounding global growth, as a result of Brexit and the US-China trade war, dampens the demand for aluminium.
At the start of 2019, Hydro anticipated global growth in demand of 1-3 percent this year. This did not include any demands from China. Realising that they were not able to meet their goals, Hydro readjusted them to 0-2 percent growth after the first quarter, and by the following quarter, it was readjusted once again to 0-1 percent.
Prepared for Brexit
Hydro has, like many others, been following the Brexit negotiations closely. Aasheim explains that they have prepared for what may become "severe Brexit". That is, the British leave the EU without a deal, as early as October.
“We have adapted the operation in the UK as well as possible, so we are not as directly affected by Brexit. But we are affected in the sense that Brexit is contributing to uncertainty in Europe, which translates into global uncertainty and lower demand in general”, says Aasheim.
“We are therefore more concerned about the indirect effect, combined with the situation between the US and China,” she adds.
Aasheim explained that the measures Hydro have made were for any new logistic challenges which may occur in the event of a no-deal Brexit.
The Norwegian government have largely agreed on trade in goods with the UK in the event of a severe Brexit. It is nevertheless expected that transport into Great Britain will be difficult as Brexit becomes a reality.
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