Norsk Hydro (Add), Rio (Add), Glencore (Add), Rusal (BUY)
Note: This is a daily stock update and the information stands true as of 30/03/26, 09:00 CET.
Company Update:
Iran’s recent attacks on Gulf aluminum smelters have resulted in the aluminum price jumping 6% to a 4-year high of c.$3,500/t. While aluminum-making costs are also rising, the simultaneous increase in premiums (as physical markets are tight) should help support margins. In such a scenario, in our coverage, Norsk Hydro, Rio Tinto, and Glencore (via aluminum-alumina trading) are great proxies. Also, Rusal could be another major potential beneficiary if the West again starts buying its products.
Remember, while Norsk has a sizeable presence in the Middle East via Qatalum (in Qatar) – already operating at below capacity due to disrupted gas supplies, so far there have been no reports of the asset being damaged by Iranian strikes.
Expert Opinion:
Rising prices on aluminum (6% this morning) are good for producers, especially those that are vertically integrated for energy. The market is already tight with low inventories, and prices are now at a 4-year high. We stick to my positive stance on Norsk Hydro (Aluminum, Add, NOK183bn mkt cap, 20% upside). Yet let's remember that we are in the stage when prices are rising, and demand expectations are being assessed but not formally revised down. But with rising prices, demand will be destroyed, and volumes will eventually fall. But at this stage, the trend is your friend, and long Aluminum (and especially Norsk Hydro) looks like a good idea.
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