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CNBC EXCLUSIVE: CNBC TRANSCRIPT: MARIA BARTIROMO SPEAKS WITH ALCOA CHAIRMAN AND CEO KLAUS KLEINFELD TODAY ON CNBC’S “CLOSING BELL WITH MARIA BARTIROMO”

WHEN: TODAY, TUESDAY, APRIL 10, 2012

WHERE: CNBC’S “CLOSING BELL WITH MARIA BARTIROMO

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Alcoa Chairman and CEO Klaus Kleinfeld. All references must be sourced to CNBC.

Video: Alcoa Earnings at $6.0B: CEO

MARIA BARTIROMO: LET'S GET MORE ON THE RESULTS WITH THE MAN IN CHARGE. JOINING ME RIGHT NOW EXCLUSIVELY ON THE TELEPHONE IS KLAUS KLEINFELD. HE'S CHAIRMAN AND CEO OF ALCOA. KLAUS, GOOD TO HAVE YOU ON THE PROGRAM. THANKS SO MUCH FOR JOINING US.

KLAUS KLEINFELD: HELLO MARIA. GOOD TO HEAR YOU.

BARTIROMO: FIRST OFF, WHAT CAN YOU TELL US ABOUT THE QUARTER? GIVE US THE HIGHLIGHTS.

KLEINFELD: WELL, ALCOA PERFORMANCE REALLY REBOUNDED STRONGLY AND I MEAN IT’S ALL AN EFFECT OF A PROACTIVE CASH SUSTAINABILITY ACTIONS THEY ARE DELIVERING. REVENUES ARE UP SLIGHTLY DESPITE THE METAL PRICE DECLINE BY 9 PERCENT – A LOT OF PRODUCTIVITY GROWTH IN ALL BUSINESSES, WE LET THIS CASH FOCUS ALMOST A BUSINESS HALLMARK. WE SHAVED OFF SEVEN DAYS OF WORKING CAPITAL, STRONG LIQUIDITY, SLAM DUNK IN MIDSTREAM AND DOWNSTREAM RECORD RESULTS. REPOSITIONING THE UPSTREAM BOUNCE BACK AND PROFITABILITY. ALL OF THAT GOOD AND BASICALLY WE CONTINUE TO SEE STABLE GROWTH ALSO IN THE ALUMINUM DEMAND MARKET 7 PERCENT FOR THIS YEAR.

BARTIROMO: I WANT TO ASK YOU A COUPLE QUESTIONS ABOUT SECTORS AND ALSO GEOGRAPHIES, WHERE YOU ARE SEEING THE STRENGTH AND WEAKNESS AROUND THE WORLD, BUT FIRST LET'S STICK ON SECTORS. I SEE THAT AEROSPACE DEMAND WAS STRONGER. WHERE WAS THE REAL DEMAND IN TERMS OF SECTORS RIGHT NOW, KLAUS?

KLEINFELD: WELL AEROSPACE IS STRONGER. ACTUALLY AEROSPACE, YOU REMEMBER, HAS BEEN A VERY STRONG MARKET ALL ACROSS EVEN THE DOWNTURN. WE’VE SEEN OUR BOEING AND AIRBUS HAVE AN AUTO BACK-- OF OVER EIGHT YEARS. WE HAVE ACTUALLY SEEN THAT THIS INCREASE IN THE QUARTER – WE HAVE TAKEN UP OUR FORECAST FOR AEROSPACE BY ANOTHER 3 PERCENTAGE POINTS. SO THAT’S ONE THING. THE OTHER ONE THAT IS VERY STRONG IS AUTOMOTIVE. AUTOMOTIVE IN THE U.S. PARTICULARLY. WE BELIEVE IT'S GOING TO GROW SEVEN TO TWELVE PERCENT THIS YEAR. IT'S ALMOST BACK TO PRERECESSION LEVELS. THAT’S GOOD, INCLUDING ALSO COMMERCIAL TRANSPORTATION IN THE U.S. LIKE CAR, LIKE TRUCKS UP THIRTEEN PERCENT YEAR ON YEAR. SO ALL OF THAT IS GOOD NEWS.

BARTIROMO: WHAT CAN YOU TELL US ABOUT THE WORLD TODAY? THE LAST TIME WE SPOKE EUROPE WAS STILL PRETTY TROUBLED. IS THAT STILL THE CASE? AND IF SO, WHERE IS THE STRENGTH IN THE WORLD TODAY IN TERMS OF GEOGRAPHIES?

KLEINFELD: EUROPE IS TROUBLED. WE SAW TODAY, YOU COVERED IT AND THE FOCUS IS ALL ON THE BOND USE AND SPAIN. BUT I THINK YOU ALMOST ARE TEMPTED TO MISS THE BIG PICTURE WHEN YOU'RE ONLY FOCUSING ON ONE SINGLE NUMBER AND WE'VE COVERED A LOT OF INDUSTRIES. I JUST TALKED ABOUT QUITE A NUMBER OF THOSE AND WHEN YOU SEE GDP GROWTH THESE DAYS, ALL THE PROJECTIONS ARE FOR GLOBAL GDP GROWTH BETWEEN TWO AND A HALF TO THREE PERCENT. THAT IS ACTUALLY NOT A BAD NUMBER. FOR THE U.S., EXPECTATIONS BETWEEN TWO AND TWO AND A HALF PERCENT. CHINA, PEOPLE TALK ABOUT SLOWING IT DOWN BUT WHEN YOU LISTEN TO WHAT PEOPLE REALLY ARE EXPECTING, IT'S PROBABLY HARBORING AROUND A SEVEN AND A HALF, EIGHT PERCENT. AND THEN THERE ARE POSITIVE MACRO INDICATORS YOU SEE BECAUSE OF THE MORE CONFIDENCE GOING UP. IN THE U.S. AND CHINA AS WELL AS IN EUROPE. PURCHASING… INDEX UP TO ABOUT THE 50 LEVEL IN CHINA AND THE U.S. BELOW THE 50 LEVEL IN EUROPE, I THINK THAT THE PICTURE IS MIXED BUT CERTAINLY NOT A DOOM STATE SCENARIO.

BARTIROMO: SO CHINA IS NOT AS SLOW AS SOME OF THE HYPE OUT THERE AND THE U.S. SHOWING IMPROVEMENT. HAS EUROPE ACTUALLY WORSENED, KLAUS IN THE LAST THREE MONTHS?

KLEINFELD: IN FACT, NO EUROPE HASN'T WORSENED. I WOULD SAY EUROPE IS HARBORING ALONG, IT’S MUDDLING THROUGH AND PRETTY MUCH AS YOU EXPECTED AND WHEN YOU ALWAYS THINK -- ALONG THE LINE OF HENRY KISSINGER, IT'S NOT ONE TELEPHONE NUMBER FOR EUROPE. IT'S A DIFFERENT PICTURE DEPENDING ON WHERE YOU LOOK. BUT IF YOU PUT THE 27 COUNTRIES IN ONE BASKET AND PUT A MINESTRONE TOGETHER, YOU WOULD PROBABLY SAY EUROPE IS HARBORING ALONG AND THERE ARE GOOD DAYS, AND THERE ARE BAD DAYS. PROBABLY IN THE LAST DAYS WE’VE HAD SOME MORE BAD DAYS, BUT WE SEE DEMAND CONTINUING. ACTUALLY, WHAT WE SAW IN MIDSTREAM BUSINESS, DEMAND HAD BEEN PICKING UP AND IT WAS ONE OF THE DRIVERS OF STRONG UTILIZATION OF CAPACITY AND OFF ADDITIONAL PROFITS OF EUROPE.

BARTIROMO: LET ME ASK YOU ABOUT PRICES, KLAUS. YOU TALKED ABOUT ALUMINUM PRICES DOWN ABOUT NINE PERCENT. WE'RE LOOKING AT A TEN PERCENT DECLINE FROM MARCH 1ST. WHEN, FROM YOUR STANDPOINT AND SORT OF THE DEMAND SUPPLY SITUATION, WHEN WOULD YOU EXPECT PRICES TO STRENGTHEN, IF AT ALL?

KLEINFELD: WELL, WE ARE SEEING A VERY INTERESTING PICTURE HERE. WE'RE SEEING THAT THE PHYSICAL DEMAND FOR METAL IS VERY, VERY STRONG AND THAT'S REFLECTED BY THE PREMIUM THAT IF YOU WANT TO BUY A TON OF METAL HERE IN NEW YORK, YOU WOULD YOU HAVE TO BUY IT FOR A PHYSICAL PREMIUM, A MIDWEST PREMIUM HERE TO GET IT DELIVERED TO YOUR DOORSTEPS. SAME THING IS TRUE IN EUROPE, SAME THING IS TRUE IN ASIA. AND THESE REGIONAL PREMIUMS ARE AT AN ALL TIME HIGH, THESE HAVE ACTUALLY GONE UP OVER THE LAST FEW YEARS. THAT'S BEEN DRIVEN UP BY PHYSICAL DEMAND AND PHYSICAL DEMAND IS DRIVEN BY PEOPLE THAT REALLY NEED THE METAL FOR THE PRODUCTION SIDE, FOR THE MANUFACTURING. AND PEOPLE THAT SEE IT AS AN ASSET CLASS. THE OVERHANG THAT WE HAVE, AND THAT HAS PUT AN ENORMOUS PRESSURE ON THE PRICES, WHICH HAS DRIVEN THE PRICES DOWN, IS THAT LIQUID COMMODITIES HAVE ALSO BECOME VERY MUCH AN ELEMENT OF EVERYTHING THAT IS GETTING TRADED THESE DAYS AND ALL KINDS OF TRADES AND THAT IS VERY OFTEN TRADED ON THE MACRO DYNAMICS. AND MACRODYNAMICS ARE VOLATILE AND CURRENTLY IN THE LAST FOUR OR FIVE MONTHS, THE NEGATIVE SENTIMENT SEEMS TO HAVE WON OVER AND THAT PUTS THE PRESSURE ON IT.

BARTIROMO: KLAUS, I KNOW YOU HAVE HAD TO CUT PRODUCTION. ARE YOU LOOKING AT BRINGING SOME OF THAT BACK ONLINE OR ARE THERE MORE CUTS AHEAD IN TERMS OF PRODUCTION?

KLEINFELD: NO. WE ARE IN THE PROCESS OF CURTAILING ABOUT 530,000 TONS OF OUR SMELTING PRODUCTION. JUST EARLIER THIS WEEK WE ANNOUNCED THAT WE ARE CURTAILING ABOUT 390,000 TONS OF ALUMINUM REFINING…AND IT'S ALSO PART OF -- IT'S NOT JUST THE RESPONSE TO THE MARKET CONDITIONS. IT'S PART OF OUR MIDTERM STRATEGY, COMING DOWN ON THE COST CURVE. SO IT'S NO COINCIDENCE THAT THESE PLACES THAT ARE AFFECTED BY THESE CUTS ARE THE PLACES THAT ARE HIGH ON THE COST CURVE AND WE ARE BRINGING THOSE DOWN. AND AT THE SAME TIME, WE ARE BUILDING OUT THESE PLACES THAT ARE LOW ON THE COST CURVE. WE HAVE A GIGANTICLY BIG PROJECT UNDER WAY IN SAUDI ARABIA. FIRST PLACE IS COMING ONLINE IN 2013. THAT ALL BRINGS US DOWN ON THE COST CURVE AND MAKES US MORE COMPETITIVE.

BARTIROMO: ALRIGHT KLAUS, I KNOW YOU'VE GOT TO JUMP ON THE CALL WITH ANALYSTS AND WALL STREET INVESTORS, WE WILL LET YOU GO. WE APPRECIATE YOU JOINING US RIGHT NOW. KLAUS KLEINFELD ON THE TELEPHONE FOR US.

KLEINFELD: THANK YOU, MARIA.

BARTIROMO: WE'LL SEE YOU SOON. KLAUS KLEINFELD.

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