China spot alumina prices rise on smelter demand

* Chalco increases spot alumina prices by 4 percent * Aluminium smelters keen to import alumina By Polly Yam HONG KONG, Aug 3 (Reuters) - Chinese aluminium smelters are bringing idle and new capacity onstream and driving up spot prices of alumina, the main material for producing aluminium, smelter officials and traders said on Monday. Rising domestic alumina prices were encouraging smelters to look for imports, which rose 24 percent on the year to June after reaching a 15-month high in April. Aluminum Corp of China Ltd (Chalco), the world's fourth-biggest alumina producer and China's top supplier, raised its spot alumina prices by 4.3 percent to 2,400 yuan ($351) per tonne over the weekend, according to its website. (www.chalco.com.cn) "Smelters are interested in imports," a smelter official said. "Local prices are expected to rise further." Other refineries in China were selling spot alumina at around 2,350-2,400 yuan per tonne, up from 2,200-2,300 yuan in July and below 2,000 yuan in late March. Large Chinese aluminium smelters were keen to book forward imports to lock in with current prices, though prices for spot imports have risen about 10 percent from last month, a trader with an international trading house said. "Large smelters want insurance," he said. "Chinese prices are now around 2,400 yuan. But next month, the prices could be changed." Spot alumina was being offered around $300 per tonne to Chinese ports, up from about $270 last month, traders and smelter officials said. Chinese smelters have restarted nearly 3 million tonnes of idle and new capacity since March and another 1 million tonnes of capacity is expected to start production before November, boosting demand for alumina, they estimated. Chalco has reopened some of its 960,000 tonnes of aluminium capacity that was closed in the fourth quarter of last year, and may restart the rest if aluminium prices remain firm, a company source said. "We need to see for half a month or one month if prices will stay stable," the source said. Spot aluminium prices have risen nearly 10 percent over the past month to about 15,000 yuan per tonne on Monday in China, supported by strong prices on the London Metal Exchange. China, the world's top producer of aluminium, produced 1.05 million tonnes of the metal in June, up 5.5 percent on the month but down 5.7 percent from a year earlier, official data showed. ($1=6.83 yuan)