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Norsk CFO: Aluminum needs level playing field with China

China's practice of offering subsidies to local aluminum producers is creating an unfair environment for U.S. and European producers of the metal, according to the chief financial officer of Norsk Hydro.

Eivind Kallevik said the sudden and unpredictable support to Chinese rivals had created difficulties for other countries.

"It becomes a challenge and particular for areas closer to China, but it does create a ripple effect for Europe and the U.S," he said.

"We should try to create a fair and level playing field. There is still support [from Europe], but the speed and aggressiveness also needs to be tackled."

In April, China signed a deal with the U.S. which raised expectations that the flow of Chinese semi-fabricated aluminum products into Western markets would stop.

However, on further inspection it was revealed that the deal was limited in respect of the aluminum companies and products that it covered.

Meanwhile, prices for aluminum have rallied more than 11 percent the last 30 days as futures traders have swarmed to the lightweight metal.

Kallevik said the possibility of prices rising too high as smelters fire back up was not yet a major risk.

"I think the market is up from £1,500 to £1,640 per ton [in recent weeks], so it is not a huge increase.

"Raw material costs have risen as well so there is a certain risk, but how big that is, I'm not too concerned at the minute," he told CNBC.

And he said he remained positive on fresh demand from the auto industry.

"I am quite optimistic on substitution from steel to aluminum," he said.

"Aluminum is the perfect way to reduce weight of a car and through that, help to reduce emissions."


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