Key Takeaways:
- Norsk Hydro declared a second force majeure on Qatar aluminium sales
- Qatalum terminated a marketing agreement; Hydro disputes the move
- The 648,000-tonne smelter is operating at 60% after a March shutdown
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Norsk Hydro declares 2nd force majeure on Qatar aluminium supply
Norsk Hydro declared a second force majeure on aluminium sales from Qatar after its Qatalum joint venture terminated a marketing agreement, according to a notice reviewed by Reuters on Friday.
"Qatalum has notified Hydro that it terminated the agreement under which Hydro markets and sells Qatalum metal," the force majeure notice said, adding that Hydro disputed Qatalum's right to end the contract.
Hydro, which owns 50% of the 648,000-metric-ton-per-year Qatalum project alongside Qatar Aluminum Manufacturing Co, known as Qamco, issued a first force majeure in early March after the Middle East war interrupted the plant's gas supply. That force majeure remains in place even though Qatalum subsequently received enough gas to operate at 60% of capacity.
The second force majeure turns a temporary operating problem into a contract dispute: even if production improves, Hydro may not have legal access to the tonnes it already promised customers. The company said it could not estimate the duration or full impact but would work to minimize disruption.
Qatalum told Hydro it will not deliver metal under the relevant agreements, and Hydro has been unable to persuade the joint venture to withdraw the termination notice, the notice said. "Consequently, Hydro would currently not be able to fulfil its delivery obligations under the sales contract, even if the situation in the Middle East improves."
The dispute comes as U.S. President Donald Trump said on Thursday that a peace deal with Iran to end the three-month-old war could be signed as soon as this weekend, although Tehran said it had not made a final decision.
It was unclear why Qatalum terminated the agreement. Qatalum and Qamco, which is 51%-owned by state-run QatarEnergy, did not respond to requests for comment on Friday, a non-working day in Qatar.
The loss of a 648,000-tonne supply stream tightens the global aluminium market at a time when physical premiums — the extra cost paid on top of LME aluminium prices for delivery in a specific location — are already under pressure from supply constraints. Buyers who relied on Hydro for Qatalum metal may need to source replacement tonnes in the open market, where availability is limited.
This article is for informational purposes only and does not constitute investment advice.
