DJ UPDATE: Norsk Hydro: Cuts 100,000 Tons At Sunndal Aluminum

LONDON, Mar 26, 2009 (Dow Jones Commodities News via Comtex) -- (Adds details, background, company comment) Norwegian aluminum producer Norsk Hydro ASA (NHY.OS) has deepened its production cuts by a further 100,000 metric tons of annual capacity at its Sunndal smelter, amid "demanding" market conditions, the company said Thursday. The closure of its oldest potline at Sunndal will take the company's total global aluminum cuts to 500,000 tons, or around 30% of its annual capacity in 2008. The closure will take around two months to complete and will result in 160 temporary layoffs out of 1,000 employees. The potline is also the oldest production line still in operation in the company, and has high production costs. Other aluminum producers worldwide have been slashing output in a move to cut costs amid declining aluminum demand and collapsing prices, which are some 59% below peak July levels. U.S. Alcoa Inc (AA), Russia's UC Rusal and Aluminum Corp. of China, or Chinalco (ACH), have slashed the most output so far. Because it takes two tons of alumina to make a ton of aluminum metal, producers have also been cutting production of the raw material. Norsk Hydro has itself cut alumina production at its Alpart refinery in Jamaica by 50%, corresponding to 580,000 tons a year for Hydro's 35% share in the project. Norsk Hydro has already said it is reviewing all staff and support functions and working to simplify its business model to have a more concentrated focus on operations and markets.