SAN FRANCISCO (MarketWatch) — Buoyed by stronger aluminum prices and cost savings, Alcoa late Monday swung to a fourth-quarter profit and projected global demand for the metal will double by 2020.

Alcoa’s AA, +2.05% results beat Wall Street’s targets and marked the company’s highest quarterly sales and profit since the economic downturn forced the company to slash spending and curb output.

It projected growth for all its end markets this year but warned raw material costs will continue to rise.

Alcoa, seen as a key barometer for global manufacturing, posted fourth-quarter net income of $258 million, or 24 cents a share. Sales rose 4% to $5.6 billion from last year’s same period.

Excluding special items, Alcoa said it earned 21 cents a share. Analysts polled by FactSet Research had expected Alcoa to earn 18 cents a share on $5.6 billion in sales. In the year-ago period, Alcoa lost $277 million when aluminum prices and demand tanked.

Alcoa, whose products are used by the construction, airline, automotive and home-appliance industries, said global aluminum demand will grow 12% in 2011, on top of 13% growth last year.

Feds make their case

Prices have strengthened since last summer.

In the recent quarter, Alcoa said its averaged realized price per metric ton of aluminum rose 17% from the year-ago period.

Despite increased demand, Alcoa said its shipments of aluminum products fell 14% on a metric ton basis from the same period last year.

Alcoa shares are off to a bright start for the year. After the first week of trading, the stock is up 7%, making it the second best percentage gainer on the Dow Jones Industrial Average.

Alcoa shares fell 1% to $16.26 in late trades following the earnings report.