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.

Kaiser Aluminum (NASDAQ:KALU) became the latest bellwether to report earnings this week, marching an abrupt about-face from a $24.8 million gain a year earlier to a $22.1 million loss for the third quarter of 2008. Declining metal prices forced the company to log $43.8 million in mark-to-market losses from derivative positions, erasing similar gains posted through the first half of the year.

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 (NYSE:ACH) and Alcoa (NYSE:AA) scaling back production, and warnings of softening demand emanating from the likes of Rio Tinto (NYSE:RTP) and POSCO (NYSE:PKX), the near-term outlook for aluminum producers is more threatening than a rising thundercloud.

Even Century Aluminum (NASDAQ:CENX), which disappointed analysts this week despite a fivefold earnings increase, is hunkering down for difficult times ahead by cutting all discretionary spending. The near-term trend doesn't look much better for steel, with ArcelorMittal (NYSE:MT) announcing its own production cuts.

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.

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Fool contributor Christopher Barker captains yachts and writes about stocks. He can also be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns no shares in the companies mentioned. The Motley Fool has a disclosure policy.