OSLO, April 25 (Reuters) – Norsk Hydro will miss its cost-cutting target this year and faces possible writedowns as its Brazilian operations work at reduced capacity following a spill, the Norwegian aluminium producer it said on Wednesday. Norsk was ordered by regulators to cut output from Alunorte, the world’s largest alumina refinery, which triggered cutbacks at its nearby Albras aluminium plant and a scramble among other factories and customers for supplies. Unless it gets permission in the second quarter to restart output, it may have to write down the value of Alunorte and its related Paragominas bauxite mine, and also faces the risk of impairments at Albras and other plants, the company said. Even if Hydro wins permission to restart Alunorte, it would take about three weeks to reach full production, it said. As a result, Hydro said its “Better” improvement program is now expected to miss its target of 500 million Norwegian crowns ($63 million) in cost cuts this year. Brazilian authorities have ordered Alunorte, which has a capacity of about 6.3 million tonnes of alumina per year, to slash production by 50 percent after the plant admitted to making unlicensed emissions of untreated water during severe rains in February. In April, Hydro said the neighbouring Albras aluminium plant would also halve production, cutting by the equivalent of 230,000 tonnes of aluminium per year. Hydro’s Brazilian outage and U.S. sanctions imposed on Russian rival Rusal have caused fears of a supply crunch, briefly sending prices this month to seven-year highs, although the rally later faded. “The U.S. sanctions on Rusal have caused great uncertainty in the world’s aluminium markets and will impact trade flows and availability of metal and raw materials throughout the aluminium value chain,” Chief Executive Svein Richard Brandtzaeg said in a statement. “The Brazilian authorities’ embargo on Alunorte adds to the uncertainty in the aluminium industry,” he said. Norsk still expects 4-5 percent growth in global aluminium demand in 2018, but now predicts a supply deficit for the year, rather than the balanced market it had previously anticipated. Hydro reported 3.15 billion Norwegian crowns ($398 million), in underlying Jan-March earnings before interest and taxes, up 38 percent and better than the 3.06 billion expected in a Reuters poll of analysts.