The Truth About Chinese Aluminum Demand

NEW YORK ( TheStreet) -- The media, those flailing little devils, can't seem to find an equilibrium on Alcoa ( AA) and China. Here's what Reuters said in a headline:

"Alcoa trims its aluminum demand outlook for China."

Got that? Demand is falling in China. And, uh, here's what Barron's said in their headline, which ran in the exact opposite direction: "Alcoa: No China Aluminum Slowdown."

How can a trader in his right mind bridge those dueling realities? Or is this one of those bridges to nowhere? Actually, a simple use of context works. Barron's, like Marketwatch and others, fails in this regard by only trafficking in absolute growth forecasts. And it's true: in absolute terms, China aluminum demand remains robust.

Alcoa predicts aluminum consumption growth in 2012 of 11 percent. But as Reuters makes clear in its first sentence but the others neglect to mention in any sentences, "Alcoa Inc. said on Tuesday it lowered by 1 percentage point its outlook for China's aluminum consumption growth in 2012."

Indeed, Alcoa's forecasts are slowing. They are still good (and their first-quarter earnings, as we discussed yesterday, were great) but they are clearly trimming outlook demand for China.

It's a distinction worth making. Too many in the media do not. Don't let them fool you.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

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