ALUMINIUM-Major market developments in July

LONDON, Aug 7 (Reuters) - The fundamentals of the aluminium market are a side issue for now and prices will continue to rise near term as investors pile into commodities, some analysts say. But others believe a continued lack of improvement in demand should force prices lower again. "Investors are looking to get on the commodities train again, including those who lost out on the previous commodities bubble," said David Wilson, director of metals research at Societe Generale. He said aluminium was considered to be under-valued relative to other metals and saw very little downside for prices. "We're advising customers to buy on any dips. The fundamentals are not particularly relevant at the moment." Independent consultant Angus MacMillan said he expected a correction in prices in the coming weeks, initially targeting $1,750 a tonne. He was not convinced that the world economy was turning the corner and also voiced concerns for a double-dip recession and China's ability to keep buying metal. "I don't think demand is picking up to any great extent. China is soaking up a large proportion of the western surplus and how long it continues to do that will be a critical factor," he said. Citigroup analyst David Thurtell said the fundamental picture had improved, with signs of the important automotive sector recovering. But he was wary about smelter restarts. "You can't think they (restarts) are too far away. Some 80-90 percent of the industry is profitable at these levels," he said. Thurtell thought there would be a flurry of restarts if prices remained at or above current levels for around six months. At 1002 GMT the London Metal Exchange (LME) three-months aluminium price was indicated at $1,980/90 a tonne. Below are some of the more significant recent developments in production, stocks and prices that may influence the direction of the market in 2009. PRODUCTION: July 31 - Ormet Corp , an independent U.S. primary aluminium producer, said it is deciding whether to cut aluminium output at its Hannibal, Ohio smelter and the extent to which its employees would be affected. Its 266,000 tonnes per year (tpy) smelter has six potlines, only five of which have been running since May 20. It said it was forced to shut some output because of a shortage of alumina. [ID:nN31452678] July 24 - Primary aluminium output in China rose to 1.029 million tonnes in June from 984,000 tonnes in May, provisional figures from the International Aluminium Institute (IAI) showed. In June 2008 China's aluminium production was 1.172 million tonnes and last year the country produced 13.105 million tonnes, the institute said. [ID:nLO82524] July 20 - Global daily average primary aluminium output excluding China fell to 63,300 tonnes in June from 63,600 tonnes in May, provisional figures from the International Aluminium Institute (IAI) showed. Total production in June was 1.899 million tonnes compared with 1.973 million tonnes in May. Total production in June 2008 was 2.111 million tonnes. [ID:nLK89781] July 17 - China produced 5,678,000 tonnes of primary aluminium in the first half of 2009, down 11.7 percent from a year earlier. Output of alumina fell by 4.6 percent over the same period to 10,622,200 tonnes. [ID:nAPI000643] July 16 - Rio Tinto Plc said the Sebree aluminium smelter in Kentucky has signed a new long-term power contract, which will secure smelting operations through to 2023. [ID:nWNAB8053] July 10 - Vedanta Resources Plc will begin bauxite mining for its alumina plant in India's eastern state of Orissa by October, a top company official said. He also said the firm will invest $1.23 billion to expand its capacity sixfold by 2011. The start of mining has been delayed for at least four years by protests from indigenous people who consider the area that will be mined as sacred ground. [ID:nDEL283638] July 9 - BHP Billiton said production has started from its Alumar alumina refinery expansion in Brazil. The company said it expected ramp up to full production in the second half of the year. [ID:nSYU006823] July 6 - Hydro Aluminium, the German unit of Norsk Hydro said it will keep its large Neuss aluminium smelter open for the immediate future while a new German state aid plan for metal companies is assessed. Company said in April it would stop production in June. [ID:nL6311896] PRICES LME aluminium prices finished July at $1,895 a tonne, up 16 percent from $1,629 a month earlier. Anxieties about the world economy caused prices to weaken early in the month and three-months eased to $1,545 on July 8. These worries persisted for a time as attention remained focused on weak demand, but risk appetite returned around mid-month and it was upwards all the way after that. On Wednesday aluminium reached a nine-month high of $2,115 a tonne. But disappointing U.S. economic data revived fears over the economic outlook. This and investor caution ahead of monthly payrolls data on Friday combined to push prices below $2,000. In July, the twice-yearly Reuters base metals price poll [MET/POLL] put the median average for the LME cash aluminium price at $1,499 a tonne, compared with the January forecast of $1,604.70 a tonne. [ID:nSP538111] STOCKS Total exchange stocks were 4,750,237 tonnes, or 50 days of consumption at the end of July, up from 4,574,282 tonnes a month earlier. Despite high LME stocks, the market remains concerned that supplies in the near term are tighter because a substantial amount of metal in warehouses is tied up as collateral for financing deals for banks. Total visible stocks, including latest International Aluminium Institute (IAI) unwrought stocks, were 5.991 million tonnes, little changed from a month earlier. IAI unwrought stocks fell to 1.241 million tonnes at the end of June versus 1.409 million at the end of May. Estimated aluminium stocks at the Japanese ports of Yokohama, Nagoya and Osaka fell for the fourth consecutive month to 207,600 tonnes at the end of June, down 14.7 percent from a month earlier, trading house Marubeni Corp <8002.T> said. The decrease was attributed to a sharp decline in imports of the metal as demand remains weak. [ID:nT10765] (3000 Xtra users can access Reuters Metal Production Database (MPD) by clicking on http://mpd.session.rservices.com. MPD details historical and predicted output and capacity for bauxite, copper, lead, zinc and gold mines, alumina refineries, aluminium, copper, lead and nickel smelters and copper, zinc, lead and nickel refineries between 1997 and 2012.) (Karen Norton; edited by Peter Blackburn)