Feb 14 (Reuters) - Norwegian aluminium producer Norsk Hydro (NHY.OL) , opens new tab posted a smaller than expected rise in quarterly earnings on Friday, as higher costs and weak downstream demand offset gains from strong alumina and aluminium prices.

Its adjusted earnings before interest, taxes, depreciation and amortisation more than doubled to 7.70 billion Norwegian crowns ($690.5 million) in the final quarter of 2024, but missed analysts' consensus , opens new tab of 8.28 billion crowns.

U.S. President Donald Trump's 25% tariffs on steel and aluminium are inflating U.S. prices and exposing the gap in domestic production, creating a potential cost surge for aluminium producers like Hydro who rely on imports to meet U.S. demand.

"As the U.S. is a major aluminium importer, tariffs will likely raise premiums and costs, with Midwest premiums already surging to the highest levels since April 2023," Hydro said in the statement.

The U.S. aluminium premium over the global benchmark on the London Metal Exchange (LME) has shot up by a quarter since last Friday to 35 cents per pound. It has surged by 60% since Trump was elected.

Hydro said it continues to take and evaluate mitigation actions for exposed trade flows across the U.S. border.

It said its extrusions business was minimally impacted by the tariffs, as it relies mainly on domestic raw materials and typically passes higher LME prices and premiums on to customers.

However, due to continued market weakness, the extrusions unit is taking steps to cut costs and improve efficiency. This will include cutting more than 900 full time jobs through site closures across Europe and the Unites States, Hydro said.

Hydro's European aluminium volumes have fallen in recent years, partly due to weaker electric vehicle production amid Germany's subsidy cuts and EU tariffs on Chinese imports.

As a result, the company announced in November it would phase out its battery and green hydrogen businesses, while focusing on aluminium recycling and extrusion.

But the weak EV sales, especially in Germany, also weigh on automotive extrusion demand, it said.

Hydro expects underlying demand for its products to gradually improve into 2025, driven by lower interest rates.

($1 = 11.1511 Norwegian crowns)

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https://www.reuters.com/markets/commodities/aluminium-producer-norsk-hydros-core-profit-lags-forecast-q4-2025-02-14/