July 7 (Bloomberg) -- Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, is halting production at a venture in the northern province of Shanxi because of a power shortage.

     The provincial government ordered smelters to cut output to ensure power supply for farming, Wang Suomin, a manager at the Shanxi Huaze Aluminum & Power Co. venture, said by phone today.

The venture has an annual capacity of 280,000 metric tons.

     The government ordered smelters to halve output, and producers with 700,000 tons of capacity may have been affected, research company CBI China Co. said today. That's nearly 5 percent of output in the world's largest producer. Aluminum prices rallied 31 percent this year after snowstorms in China curbed production.

     ``This will boost aluminum prices,'' Le Yukun, an analyst at BOC International Ltd., said by phone from Shanghai. ``Power shortages may spread and worsen, forcing more output cuts.''

     Aluminum for three-month delivery gained 2.3 percent to trade at $3,231 a ton on the London Metal Exchange at 2:38 p.m.

Beijing time. The metal rose 1.7 percent to trade at 19,680 yuan on the Shanghai Futures Exchange.

     China's summer power shortfall will reach 16 gigawatts, the state-run China Daily reported on July 1, citing the electricity regulator. The country is in its sixth year of power shortages.

                         Power Shortage

     There is a power shortage in the Shanxi province, said Zhang Qing, a spokeswoman with Beijing-based Aluminum Corp, better known as Chalco. Zhang said she couldn't comment on what's happening with production.

     Huaze is ``gradually'' cutting output, Wang said, without giving a loss estimate at the venture, which is owned by Chalco and Shanxi Zhangze Electric Power Co.

     The Shanxi provincial government ordered smelters to cut capacity by 50 percent, CBI analyst Eric Zhang said today. CBI didn't name smelters affected.

     The bigger smelters in the province include Shanxi Huasheng Aluminum Co. and Shanxi Guanlu Co. Huasheng is a joint venture between Chalco and Shanxi Guanlu, with an annual capacity of 220,000 tons.

     Zhen Qijia, secretary of Shanxi Guanlu, said he is unaware of the situation at Huasheng. Calls to Huasheng were not answered.

     China is the world's largest producer of aluminum, which is used in aircraft and cars, with a total capacity of more than 15 million tons.