Alcoa and Alumina Ltd. Look to Negotiate Slowdown in China

  Aluminum stocks have been beaten down in recent weeks as signs of slower growth in China and Europe raised questions about the global economy and demand for their products, The Associated Press reports. Over the last month, the Global X Aluminum ETF (ALUM) has fallen roughly 7.36 percent. Five Star Equities examines the outlook for companies in the Aluminum industry and provides equity research on Alcoa, Inc. (NYSE: AA - News) and Alumina Ltd. (NYSE: AWC.AX - News) (ASX: AWC.AX - News).

China last week reported its biggest trade deficit in at least 22 years as government data also showed the world's second-largest economy had the weakest January-February factory-production gain since 2009. "China is the biggest consumer of most commodities and any change in growth forecast of the country will have a bearing worldwide," said Bikash Bhalotia, a metals and mining analyst at PINC Research in Mumbai.

Australia's Bureau of Resources and Energy Economics recently forecast that alumina may average $339 a metric ton this year -- 12 percent less than in 2011, as world aluminum production slows.

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Not all of the aluminum industry remains downbeat, however. Alcoa, the largest U.S. aluminum producer, forecast 7 percent growth in global aluminum demand this year and said cutbacks in production will result in a global supply deficit of 600,000 tons in 2012. Alcoa added that its growth projection was ahead of the 6.5 percent rate required to meet the company's forecast of a doubling in global aluminum demand between 2010 and 2020.

Alumina Limited, through its 40% equity interest in Alcoa World Alumina and Chemicals, engages in the bauxite mining, alumina refining, and aluminum smelting businesses.