Good morning, everyone. Good morning, to all of you also following us on the webcast. Welcome to Hydro's presentation of first quarter results for 2018. As usual, they will be presented by our CEO, Svein Richard Brandtzæg, and CFO, Eivind Kallevik. After that, we will have time for a Q&A afterwards. Let's start, Svein Richard.
Thank you very much, Inger. Thank you. The overall situation for the global aluminum industry is now marked by significant uncertainties. Several factors are influencing us at the same time. We have the U.S. tariffs, the U.S. sanctions against Rusal, and of course also the Alunorte situation. This is a very demanding situation for Hydro, for our employees, and our customers. However, with regard to the Alunorte situation, and with the facts we now have in place, and also the measures we are implementing, I'm confident that we are going to resolve the situation to the best for Hydro and the local societies. Let us then move on to the quarterly results and the headlines for the quarter.
Just to remind you, now we are comparing the results with the same quarter last year, instead of the previous quarter as we have done in the past. This is very much due to the fact that we now have a big downstream organization, and there are seasonal variations that are significant in that part of the value chain. The underlying EBIT of the quarter was NOK 3.1 billion , up from NOK 2.3 billion in the first quarter 2017, and very much supported by higher alumina and aluminum prices, but somewhat offset by higher input cost, material costs. We have strong results in Extruded Solutions. I will come back to that, showing also improved margins in that business.
With regard to the "Better" program , we continue our efforts in all parts of the value chain to improve the underlying business, but due to the situation in Brazil with 50% production in Alunorte and 50% production in Paragominas and Albras, we do not expect to reach the target for this year. I'm very happy to see that the Karmøy technology pilot is being ramped up, and we will be in full production within the first half of this year. Also good to see that the sales are delivering the results that we were hoping for with regard to the lowest energy consumption in the world. With regard to the market, we expect that the demand will increase this year with about 45% in total.
The balance, supply, demand balance will move towards a deficit during the year. I will come back to that also. There are also uncertainties that I've already mentioned related to the tariffs in the U.S., the sanctions against Rusal, and also the Brazilian situation. If we then, move to Brazil and take a look at the Alunorte situation. We are now running Alunorte at 50% capacity for the eighth consecutive week, and also that is impacting the Paragominas production, where we also now producing 50% capacity. We took down Albras, the aluminum smelter, this is just beside Alunorte, down to 50% last weekend. We are now rotating.
We have rotated between different lines in Alunorte, but we are now, there are seven production lines, and we are now producing with five lines and have a standby situation of two lines. Meaning that it will take about one month to come back to full production with that way of operating. The alumina market is very tight. I will come back to the price effect this situation had in the marketplace. With regard to timing, when we can resume full production is still uncertain. We have introduced several measures in Brazil. We already decided to increase the robustness of the water treatment system with 50% capacity increase. That is a investment of almost a half a billion norwegian kroner.
We also decided to establish a Sustainable Barcarena Initiative, which will be a legal entity that will support the local community with NOK 250 million. We have updated emergency preparedness procedures and also in general increase the robustness of Alunorte due to the increased rainfall. There has been a lot of misunderstandings in the press related to Alunorte, and when I show this picture, it shows a overflow within the red mud deposit, and that has been used as evidence of overflow from the red mud deposit into the nature. The problem is that this doesn't show the full reality.
This is the same area, show the picture of the full area, which is showing that it is this is a design effect where we are transferring water from one part of red mud deposit area to another one, and everything is collected in the end in a channel that goes to the water treatment system. Everything is under control. This has been used as evidence of overflow in Alunorte. I was aware of this situation the night after it happened, the night to the 18th of February, and was continuously updated. Of course, the situation escalated until the night to the 27th of February when it was the authorities required 50% production cut in Alunorte.
In this situation, it is good to see now that both SEMAS, the local environmental authority, and IBAMA has concluded that there's been no overflow as a result of the heavy rainfall in Alunorte from the red mud deposits. Also Ministério Público has stated there has been no evidence of overflow. I feel that this is a good basis and also probably the reason why the negotiation with authorities is now moving forward very positively. We are on a good track, but still there is uncertainties related to the final decision to bring Alunorte back to 100%. We are working hard with that, and Eivind is frequently in Brazil.
He's managing the bauxite alumina business area temporarily and doing a good job in Brazil and making sure that we move forward as fast as we can. The negotiations that are ongoing now is primarily with the government in Pará and SEMAS. SEMAS is, as I said, the local environmental authorities. We're also seeking negotiation with Ministério Público, and there are also other processes, political, legal processes ongoing. It is a complex situation. We will resolve it in the end, and we are working hard to do that as fast as possible. If you move over to the market situation and the supply-demand balance in the quarter, and the slide on left side shows the quarterly supply-demand balance since 2016.
Now, as you see, it is a fairly balanced market in the first quarter of this year. This is based on the 4.1% growth in the quarter compared to the first quarter in 2017, 4.8% growth in China, and 3.3% growth outside China. All in all, if you take a 12 months rolling average, we are now in a deficit situation for the 12 months average. If you then take a closer look at the expectation for the supply-demand balance for the rest of the year, we are then basing this balance on growth in China of 4%-6% in demand, 3%-4% growth in demand outside China.
We have taken down the expectation for growth in production in China due to the fact that there are slower ramp ups in China than what was expected previously. We expect that addition of capacity and production will be 3%-4%, which will be similar to what we see outside China, also 3%-4% expectation of growth in production. There, I would say that it will be probably closer to 3% than 4%. When we add this together now, we end up in a supply-demand balance with a deficit of about 500,000 tons-1 million tons outside China this year. This is the expectation for 2018.
You then move over to the aluminium pricing and the development, we saw in the beginning of the quarter, that was a weakening of LME. We had a realized price of $2,140 per ton in the quarter from $1,757 in the first quarter of 2017. After the situation with Rusal, the sanctions towards Rusal, the aluminium price has gone up significantly, and it's quite volatile. It was at very high levels, and or still at high level but volatile. There was a significant price difference between the Shanghai price in China and LME, which means that there is arbitrage to export out of China, like semifabricated products.
That is something we also have seen in the first quarter. With regard to the premiums, a result of the introduction of the tariffs in the U.S. was that the standard ingot premium in the U.S. market went up significantly, trading at around $496 per ton, which is quite high from historical levels. In Europe also, the ingot premium is quite high at trading over on $250 per ton. You move over to alumina, also here, after the peak in October last year, we had a softening price situation. The Alunorte situation has brought alumina price to a very high level, in fact, record high levels.
We are now at the price level of $710 per ton of alumina in the market, in the PAX index market. There's limited alumina capacity available for restart and also with regard to available capacity, both outside China and with regard to new capacity and available for restarts. In China, there is capacity. The China has not exported alumina previously, but we've seen a couple of cargos out of China recently. We are active in the third-party market to secure alumina to our smelters to avoid curtailments. If the situation in Alunorte will continue for several months.
It could be that there will be a need for curtailments of capacity further on beyond what we have done already to take down Albras with the 50% capacity. If you take a look at the downstream market and the situation in extrusion and rolled products, we see in extrusion market, both in Europe and North America, we see 3%-4% growth, very much driven by automotive transport and also building and construction, especially in the U.S., I would say, which we also see in the rolled products market, where we expect 4% growth in demand in this year. In the rolled products market, it's very much about substitution for automotive, but also building and construction market, especially in the U.S. market, is moving very positively.
With regard to Section 232 and the tariffs, it has had a strong implication on the premiums in the US market, as I have already mentioned. There are countries that are exempted from this temporarily and maybe they will be permanently exempted, but there are some uncertainty related to how this will be done, if there will be quotas or how this will work . Canada, Mexico is two examples. European Union, Australia and South Korea is also exempted. There are still uncertainty related to this. For Hydro, it is first of all exports from Qatalum to the U.S. market that has been impacted.
As I said, the standard ingot premium is already corrected to higher levels, basically, it is not very serious impact on Hydro's business as such. With regard to the sanctions impacting Rusal, now the period has been extended for the wind down period up to 23rd of October. There is still time to adapt, but this is a quite dramatical situation. Of course, we are working out how to handle this in the best possible way. We have had the relations with Rusal both on the upstream part, on the raw material, but also on the metal side, for example, through remelting our standard ingots.
We are evaluating the effects and implementing mitigating actions to handle this change in the marketplace. If you move over to the input costs for our production upstream, starting with the bauxite alumina business, of course, caustic soda is a very important part of it. We are consuming about 100 kilo caustic soda per ton alumina produced. This raw material has increased in price. It has more than doubled within the last couple of years. This has had impacted the cost level. It's now leveling off. There is a time lag of about two months on this and will still impact us in the second quarter.
Fuel oil is also at high level. The same with steam coal, quite firm on high levels. These are, again, showing higher input cost for alumina production. With regard to metal production, alumina is, of course, one of the major factors there that are affecting us. There is a time lag of about two to three months in alumina pricing before it hits the bottom line, meaning that the steep increase in price of alumina will impact the primary business at least in the third quarter this year.
Also, raw material for anode production, coal tar pitch and petrol coke has increased in price and will still impact us in the second quarter this year, although it's now leveling off. If you then move over to margins and cost for primary production, we see that compared to the first quarter in 2017, we have higher margins in metal production, but also higher costs. The margins are supported by higher prices, $2,130 realized in the quarter for metal production, compared to $7,057. Same with the alumina. Also here, higher margins compared to first quarter 2017, but also higher cost due to raw materials, but also due to lower production in Paragominas and Alunorte.
The margins are both in with regard to metal and also alumina, lower than in the fourth quarter last year. Sales from rolled products is 2% higher this quarter compared to the first quarter 2017. It's very much driven by can, but also automotive. We are selling now 21% higher body in white material to automotive than in the first quarter 2017. It's lower sales of litho and lower on foil. Compared to the fourth quarter, there you see the seasonal variation, 9% higher sales this quarter compared to the fourth quarter last year. Very much again, similar. It's automotive can driving the businesses, the demand increase. Extruded Solutions again showing the good margins, good development over time.
This is a result of the value over volume strategy. We see some higher volumes in this quarter compared to the previous, but the most important factor is the fact that the margins are improving, meaning that we get more value out of the extrusion and also the fabrication that is done in connection with the extrusion business. Very good development in Extrusion Europe, good development in Extrusion North America, and as well as Building Systems, and Precision Tubing is showing margins at good levels. As I mentioned, the Karmøy technology pilot is now being ramped up. We have 20 cells in operations, and as I said, we are now producing aluminum with the lowest energy consumption in the world.
We are expecting that the ramp up of this pilot will be finished within the first half year this year. Of course, there are very important technology elements that we will benefit from in the other smelters. There are spin-off effects from this. The total CAPEX is NOK 4.3. We will deliver the project within this limit. We have Enova support of NOK 1.6 billion as a part of the CAPEX. I leave the word to Eivind, please.
Thank you, Svein. Good morning, everyone, and welcome from me as well. I will take you through the financial developments for this quarter. Underlying result of NOK 3.1 billion, roughly NOK 800 million up compared to the same quarter last year, NOK half a billion down compared to fourth quarter in 2017. Please note that I will focus this quarter's explanation on the development towards the same quarter last year, not versus the previous quarter as we have to do in the past.
The main factors contributing positively this quarter versus first quarter 2017 is the higher realized aluminium as well as higher realized alumina prices, altogether adding some two and a half billion to the bottom line. The realized aluminium prices increased by roughly $380 per ton, up from $1,757 - $2,140 per metric ton. In addition, there's also been an increase in realized premiums, up from $266- $295 per ton, altogether contributing a positive $1.9 billion improvement within the primary division. Realized alumina prices also increased. They increased by roughly $62 per metric ton, up from $309 - $371, altogether NOK 600 million positive contribution.
The flip side is that we've seen an increase in raw material costs. For primary metal, this is roughly NOK 1.6 billion, primarily driven by higher realized alumina costs for primary, altogether NOK 1 billion, carbon of roughly NOK 400 million, and energy, roughly NOK 200 million. Bauxite alumina, we've also had increases within fuel oil, caustic, as well as coal and bauxite costs, adding up to some NOK 400 million for the quarter. The other column here consists of several items, such as positive eliminations, positive consolidation effects from taking in Extruded Solutions, partly offset by somewhat higher fixed costs as well as depreciation. We then turn to the key financials, we can see that revenues are up roughly NOK 17 billions, NOK 17 billion between the quarters.
This is primarily impacted by the full consolidation of Extruded Solutions, adding NOK 13 billion to our revenue line. The remaining NOK 4 billion primarily comes from the higher prices within our key segments. This quarter, we've excluded from reported EBIT of around NOK 3.3 billion, a gain of NOK 155 million. This is related to the normal timing effects that we do exclude every quarter. As such, underlying EBIT ends up at NOK 3.15 billion for the first quarter. Financial expenses this quarter is half a billion. This includes a net foreign exchange loss of NOK 0.3 billion. This quarter, this is primarily related to the strengthening of the NOK versus the dollar having an impact on the dollar-denominated intercompany positions.
Net interest expense is also somewhat higher compared to first quarter of 2017, driven by the higher debt level that we now carry within the company. As a result, the income before tax for Q4 was NOK 2.8 billion, compared to NOK 2.5 billion in first quarter 2017. The tax rate this quarter is 27%, very close to the long-term guidance that we do at 30%. This gives us a net income of NOK 2.1 billion, up from approximately NOK 1.8 billion the first quarter of 2017. Consequently, also the underlying earnings per share is also up from the first quarter of 2017 and is now at NOK 1.06 per share. We turn to the different business areas and start with Bauxite and Alumina.
The underlying EBIT is more or less stable compared to what we saw in Q1 2017. This quarter's result has obviously been impacted by the curtailments in Paragominas and Alunorte in March. Altogether, this has had an EBIT impact of roughly NOK 450 million for the quarter. The results have been positively influenced by higher realized alumina sales prices at $371 per ton in this quarter, compared to $309 per ton in the first quarter of 2017. This has been partly offset by higher raw material prices for caustic, fuel oil, and bauxite, as well as the reduced production volumes at both plants. The total sales volumes, though, are fairly similar to Q1, but they are down from the fourth quarter of 2017.
As you can see here, the production at Paragominas is relatively similar to what we saw in Q1 of 2017. The primary reason for that is that we had the pipeline pigging campaign in the first quarter last year, reducing the production days with 15 in the previous quarter. You look into next quarter, as Svein Richard has already commented on, we are in constructive dialogue with the Brazilian authorities to find a good solution for bringing Alunorte back to full production. The timing of this is still uncertain. As such, it is clear that the production volumes will also be impacted to a large extent for the second quarter.
Given the strong alumina prices we are seeing today, these will also partly hit our income statement in second quarter given the one-month timeline we have on realizing alumina prices. On the raw material cost side, we also expect increasing prices when we get into Q2 of the next quarter. This quarter will primarily be an increase in caustic prices where we expect to see an increase of some 5%-10% compared to this quarter. Turning to Primary Metal, the underlying EBIT for Primary decreased slightly in Q1 2018 versus Q1 2017, from NOK 900 million down to NOK 823 million.
We did realize significantly higher aluminium prices, up from $1,757 - $2,140 per metric ton. Also had somewhat increased premiums in this period, consequently having a strong impact on the result. At the same time, unless we previously guided on, we also seen a very strong cost push in our Primary division. This is primarily driven by alumina, but also to a certain extent by pet coke and energy costs. Fixed cost and depreciation is also up compared to the first quarter of last year. If we look into the next quarter, we have at the end of Q1 sold 55% of our primary production for Q2 at the price level of around $2,125 per ton.
We've also booked 65% of our premiums at a price of around $350 per ton. Overall, we expect the realized premiums for the second quarter to be in the range of $300-$350 per ton. Given the latest developments we've seen on the alumina and the aluminum price, we will see effects of this hitting our books in the second quarter results for Primary. Remember that prices for aluminum is realized with roughly one-two months lag, and the alumina cost roughly has a two-three month time lag. On the raw material cost side, in addition to the alumina that I just mentioned, we're also expecting a slight increase in the carbon anode cost.
We are seeing that both pet coke and pitch prices seem now to have been leveling off. Turning to Metal Markets, they delivered an underlying EBIT of NOK 178 million, which is up from NOK 24 million in the first quarter of 2017. If we exclude the inventory and currency valuation effects, and these are the main deviations compared to the first quarter last year, the result increased from NOK 83 million - NOK139 million in this quarter. This improvement is primarily driven by higher volumes and better margins at our remelters, but also improved results from our sourcing and trading activities. As always, when it comes to the outlook for this division, please remember that the trading results as well as the currency and inventory valuation effects are by nature volatile.
We turn to the downstream segments and start with Rolled. The Q1 results for Rolled increased by roughly NOK 125 million up to NOK 232 million. This improvement is driven by increased margins as well as improved production performance, and partly offset by negative currency effects on the dollar-denominated exports that we do. The results from the Norsk Smelters increased due to the positive effects from the new power contract, partly offset by an increase in raw material costs. If we look into the second quarter, we continue to expect a healthy demand growth for rolled products, as Svein Richard has indicated before. However, we do also expect continued margin pressure, as we have seen for some time within some of our key segments.
When it comes to Norsk Smelters, that is, of course, as always, driven by metal prices and raw material price development, which you know are quite volatile at the moment, and they will also be hit then by the increasing alumina prices. Let me again also just remind you that the new energy contract that started January 1st this year has a positive annual impact in raw products of NOK 400 million, but it's partly offset by assumption of some additional or a different energy contract in energy, which I will come back to. Turning to Extruded Solutions, let me first say to make Q1 2017 results comparable to the first quarter of 2018, I will discuss the quarterly results on a pro forma basis.
That ofcourse means that the historical figures that I show here cannot be found in the previous Sapa reports, as there are certain transactional related effects that is impacting the results and included in these numbers. Most importantly, this relates to the increased depreciation compared to the old Sapa figures, this has an annual increase of roughly NOK 300 million per year. This is mainly driven by excess value depreciation. The historical figures here then for Q1 - Q3 2017 shown on this slide, are all pro forma figures. If we then move on to the actual result. First and foremost, it is very encouraging to see that Extruded Solutions continue their value over volume strategy. Again, showing growth from an EBIT perspective over the same quarter last year.
For Q1 this year, the results are up by NOK 34 million or 5% compared to the same quarter last year. The reason for this is of course the increased volumes, but also, and most importantly, the increased margins or the net added value that Svein Richard showed you before. It is also quite encouraging that we see this positive developments in all the business units within the business areas. If you look into second quarter, we do expect also here to see a continued solid demand growth for extruded products. We are currently seeing very strong markets both in Europe and in North America, which are the two main regions for this business area. If we turn to energy, the underlying EBIT for energy decreased in Q1 versus...
2018 versus Q1 2017, from NOK 423 million down to NOK 278 million. The main driver for this decreased result is that power production has been reduced by roughly 0.4 TWh. This is mainly due to the maintenance outage at one of our power plants, as we previously communicated. That of course, in turn leads to lower spot sales into the market. In addition, as we've also communicated before, energy had a negative effect of repricing of a power contract with Rolled Products. For this quarter, that has a negative effect of roughly NOK 60 million or roughly NOK 250 million on an annual basis. On the positive side, we've seen strong prices this quarter, compared to first quarter last year, where power prices are up more than NOK 70 per MWh .
The higher prices are primarily driven by high consumption due to the cold weather. We have increased export volumes towards continental Europe, and there's been lower available production capacity in the Nordic market. If we look into the next quarter, again, as always, we do remind you that the price and volume development in energy for the next quarter is uncertain, depends on future prices, precipitation, and water reservoir levels. Let me also underline again that the negative effect in energy from the repricing of the parts of the new raw products contracts has an annual effect of NOK 250 million.
Other eliminations this quarter netted to a + NOK 161 million, compared to a + NOK 74 million in the first quarter last year, and -NOK 715 million in the fourth quarter of 2017. One factor when you compare this to the first quarter of 2017 is of course that it included Extruded Solutions in this area at that point in time. Now it is reported as a separate business area. The other line mainly comprises of corporate costs in addition to some other elements like earnings from industrial parks as well as our captive insurance company, Industrial Insurance.
This was - NOK 270 million, NOK 207 million this quarter, very much in line with the updated guidance we gave you in Q4, with an expected range of NOK 175 million-NOK 200 million per quarter. Finally, eliminations amounted to NOK 368 million in Q1. This mainly reflects the reduced stock of internally sourced alumina, as well as reduced internal margins in BNA. As you may remember, we did have a large negative internal elimination of more than NOK 400 million in Q4 in the previous quarter, and guided that these internal profits would be realized in subsequent quarters, which is partly what we're seeing then in this quarter.
If you now look at the net debt development between the end of Q4 and the end of Q1, we can see that this has now decreased from the NOK 4.1 billion at the beginning of the quarter down to NOK 3.6 billion. The underlying EBITA of NOK 5 billion is of course a positive, major positive contributor. We've had, as we always have in Q1, due to seasonality reasons, a net operating capital build-up in this period of NOK 2.1 billion. Taxes and others mainly includes tax payments, also some reversals of income and equity accounted investments. On the positive sides, it also include half a billion in dividends from Qatalum. As a result of this, we had a cash flow from operations of NOK 1.8 billion during the first quarter.
We also done investments of roughly NOK 1.5 billion, then leading to the result of ending with NOK 3.6 billion in net debt at the end of the quarter. Very quickly on adjusted net debt, as there are not many changes. We already commented on the net debt position of NOK 3.6. There is a slight reduction in pension liabilities due to the strengthening of NOK versus the euro, leading to a translation effect. The other lines are more or less stable versus Q4. As a result of this, the net adjusted debt, including equity accounted investees at the end of Q1 amounted to NOK 22.6 billion. Thank you.
Thank you, Eivind. To summarize, the priorities for Hydro going forward this year is very much as we have stated before, safety has always first priority. We also going to deliver on the sustainability agenda in Brazil. We have already decided on the Sustainable Barcarena Initiative . We have ongoing negotiations as we have talked about, and it's important for us to resume the production to 100% in Alunorte, and that will have impact on Paragominas and Albras. With regard to the integration of Extruded Solutions, that continues. There are synergies that we are going to deliver and that is confirmed, and we are working with that.
On the project side, we are ramping up the technology pilot at Karmøy, as I've talked about, and also the used beverage can line in Germany is moving in the right direction as well as the Automotive Line 3 in Germany. That is also an important addition to deliver to the automotive industry. Thank you very much for your attention.
President Eivind, are there any questions maybe from the audience? Yes, there is.
You are a big seller of alumina, and if the situation in Brazil should continue, can you explain how this will affect your clients? Are they able to source alumina, or do you think they will have eventually to close down capacity as well?
Well, if the situation at Alunorte continues, it is difficult to see how the volumes can be replaced short term. As I mentioned, there are some movements in China. If China will be a supplier to of alumina of significance is very difficult to say, but a couple of cargos we have seen already. As I mentioned, there is very little capacity to be restarted and also little new capacity coming on stream outside China. It, if it lasts for very long time, it will have an impact on the capacities also, of course, for Hydro, but also for other players.
It's too early to say, but again, there's difficult to see how all this capacity can be replaced short term.
Thank you.
There's a question here.
Good morning. Bengt Jonassen, ABG. How long can you operate at Alunorte now at the red mud depository number 1 with current production rates before it is filled up?
We have sufficient time, there's also other alternatives on how to fill the red mud depository. We're not concerned about time in the short run. We can continue to operate as is.
Any more questions from the audience here? Otherwise, we have some questions from the webcast, out, and we need the microphone down here for Stian.
A question from Menno Sanderse, Morgan Stanley. What's the additional cost inflation going into Q2 for Norsk Hydro to take into account the price delay versus spot in purchasing raw materials?
If you look at the Bauxite & Alumina area, the primary cost driver there will be caustic costs, which we expect to go up with some 5%-10% in Q2 compared to Q1, a quarterly effect of around NOK 60 million. On the primary side, again, there is a one-two month lag on the alumina price, so that will have an increase. There will be some, but more slight compared to previous quarter's increase in pitch and coke prices.
How does the uncertainty around Rusal affect Hydro's intention to acquire ISAL, which uses a lot of alumina produced by Rusal?
Okay. We are continuing the process. We expect the process will be closed within the next few months to say that way. This is a smelter that will be of important for us. It's a smelter based on renewable energy. It's same technology as we have in Husnes, so we know that very well. With regard to alumina situation, maybe you could comment on that, Eivind. Yeah, so far this is, of course, the obligation of Rio Tinto to supply the alumina situation. We will monitor that situation carefully going forward as we get towards closing.
A question from Johannes Grunselius, Handelsbanken. Is the cost breakdown at Alunorte roughly 20 80 fixed and variable costs still valid? Is it possible for you to say something about how we should see the development in cost for BNA in Q2?
We just as a comment to that, before I leave it to Even, that depends very much on the price level also and again the input cost prices. With the increasing input cost, it will have an impact on the percentage of fixed cost, of course, but maybe you could clarify that, Even.
I think if you analyze the fixed cost development today, given the raw material prices, fixed cost at Alunorte is probably closer to 15% of the total cost situation than the 20 that we've said in the past. In Paragominas it's between 65% and 70% of the total cost.
A question from Daniel Major in UBS. What's the next key date event in the restart process for Alunorte? Am I correct in that lifting of the court order is the next requirement to restart?
We don't have any specific dates. We have good and constructive dialogue with the authorities and the government of Pará. There are basically two steps. One is that the government and SEMAS need to lift their embargo. Then there's still an embargo, which were requested by Ministério Público, which sits in the court system. And then that also needs to be lifted. It's basically two steps.
The final question. Why did you choose to close Albras smelter specifically rather than the others in the portfolio that also relied on feed from Alunorte?
With regard to Albras, there is no storage capacity in Albras, and there is no alternative sources. With the obligations we have, and the situation, we're forced to take down the capacity in Albras.
Okay. Any more questions from Oslo? No. We would like to say thank you very much for coming, and have a nice day.