Bellwether sectors like steel and aluminum may provide the earliest snapshots of how global industry is responding to the financial crisis, but the view is far better from the outside looking in.
On the operational side, the lost production time from a transformer failure and resulting fire at the company's Anglesey smelter in Wales set Kaiser back a further $20 million. Excluding these items and adjusting for taxes, Kaiser said it would have earned $15.7 million -- still well short of the prior-year result.
Despite all these troubles, the company reported continuing strong demand for its fabricated products, particularly from the aerospace and defense industries. Prices for such products remained above prior-year levels in the third quarter. Kaiser considers such fabricated products to be its core competency, and revealed that the company is considering a possible decommissioning of the Anglesey smelter sometime after September 2009.
With much larger competitors like Aluminum Corporation of China
Even Century Aluminum
While I urge considerable caution on these sectors in the near term, I also remind Fools to keep their eyes on the long-term prize. Alcoa still expects 15% demand growth from China this year, and Russia's UC Rusal sees a supply shortfall looming no matter how the chips may fall. Kaiser may not be the wiser choice just now, but by following the aluminum sector closely, Fools are conducting recommended due diligence on the global economy.