UPDATE 1-US aluminum co stocks up on China power price rise

* China to raise power surcharges by up to 100 percent

* Metal shortage seen if China smelters go out of business

* Alcoa, Century Aluminum stock up

(Updates with options activity, stock moves)

NEW YORK/CHICAGO, May 13 (Reuters) - The shares in U.S. aluminum producers Alcoa Inc (AA.N) and Century Aluminum Co (CENX.O) rose sharply on Thursday on expectations the metal's price could rise if Chinese electricity price increases reduce the global supply of aluminum.

Alcoa stock closed up 2.7 percent at $12.80. Century Aluminum's was up 5.1 percent at $12.69 on the Nasdaq, while Kaiser Aluminum Corp (KALU.O) rose 5 cents to $38.40.

Alcoa options activity was heavy with overall volume 2.6 times greater than its average daily turnover near the close, according to option analytics firm Trade Alert.

Traders exchanged about 164,000 contracts, led by the trading of 144,000 Alcoa calls, which give the right to buy the shares at a fixed price by a certain date.

Analysts said the stock move was probably a reaction to China's announcement it will raise power tariff surcharges for some energy intensive businesses by 50 percent to 100 percent from June 1.

Electricity is the major power source for aluminum smelting and the analysts suggested some Chinese smelters could go out of business if the power price goes up. That would affect the global supply of the metal used in auto and aviation manufacturing, construction and household appliances.

The increase, posted on the National Development and Reform Commission's website, said the affected companies were mainly in the aluminum, cement, steel, zinc, ferroalloy, calcium carbide and sodium hydroxide sectors.

Aluminum prices MAL3 fell 16 percent from mid-April to a 3-month low of $2,056 a tonne this week, but are still 28 percent above last year's average $1,671. In London on Thursday, the metal price rose to $2,170 from $2,128.

Alcoa attracted two large option trades on Thursday, said TD Ameritrade chief derivative strategist Joe Kinahan.

One involved the October $12/$16 Alcoa call spread. The investor purchased the $12 calls and simultaneously sold the $16 calls with the hopes of seeing the stock go to $16 or higher, even though the trade's break-even point was just over $13.50, Kinahan said.

The largest bullish bet was a buyer of 20,000 October $12/$16 call spreads for $1.59, with shares trading at $13.10, said Joe Kunkle, a founder of Web information site OptionsHawk.com.

The other trade was an aggressive purchase of the June $14 call strikes -- also a very bullish play "with the belief that Alcoa shares would be above $14 by June expiration," Kinahan said.

The June $14 call strike traded 57,324 times, according to Reuters data. Some of those trades were outright buying and some were tied to stock, Kinahan said. (Reporting by Steve James in New York and Doris Frankel in Chicago; editing by Leslie Gevirtz and Andre Grenon)