Norwegian aluminum producer Norsk Hydro has had a rough year and at least one funds manager in Oslo seems to have lost patience. Newspaper Dagens Næringsliv (DN) reported Tuesday that Arctic Fund Management was dropping Hydro from its portfolio despite some better news last week.
“We’re taking Norsk Hydro out because of weak sentiment for shares related to raw materials,” manager Alexander Larstedt Lager told DN. He noted that Hydro also continues to face “operative challenges” in Brazil, where its huge aluminum refinery Alunorte has been in crisis since flooding last winter that ended up contaminating local drinking water supplies. Production has been cut in half after demands from Brazilian authorities.
Arctic Fund noted that Hydro reported last week that it has now secured an agreement with local authorities and prosecutors, but no date has been set for reopening production capacity. While some think the worst is over for Hydro, officials in Brazil confirmed it will take time before Hydro has obtained all the approvals necessary to restart production. The company also faces potential problems from trade wars launched by the US.