* Contracts would meet growing demand from auto makers
* U.S. demand for aluminium improving, lags Europe.
(Adds detail, background)
LONDON, July 27 (Reuters) - Norwegian aluminium producer Norsk Hydro (NHY.OL: Quote) said on Tuesday it would consider long term supply deals for its aluminium products to meet growing demand from auto makers.
The company told Reuters that the auto and building sectors were using more aluminium in a bid to lower the impact on the environment and that U.S. demand for aluminium was improving but that it lagged Europe.
Norsk Hydro's business extends from smelting aluminium to selling metal sheets to carmaking and construction companies.
Earlier on Tuesday, Europe's third-biggest aluminium producer said the aluminium market may have hit its 2010 peak already in the second quarter and stuck to its forecast for 12 percent growth in its upstream and downstream markets.
The company posted above-forecast April-June core earnings and said global aluminium markets remain oversupplied even as demand picks up along with a moderate recovery in economic growth.