Tuesday, January 12, 2010

Alcoa Will China Hurt?

Alcoa (AA) if 2009 was all about demand destruction then 2010 should be about demand recovery. Commercial airlines, housing and auto’s all continue to be major question marks. If you follow James Chanos over at Kynikos Associates you fear the Chinese Bubble. Alcoa seems to be positioned to experience significant fall out from the China Bubble. Short interest is some 66 million shares or about two days worth of trading. The problem with management comments in both the earnings release and the conference call is they do not segment local markets and market verticals in their financial data. They look at alumina as one global market and ignore specific drivers. Yet they will refer to demand destruction of 2009.