BEIJING, March 18 (Reuters) - Aluminium smelters in China's southwestern province of Yunnan are bringing factories back online thanks to better power availability, which is likely to restore about 500,000 metric tons of annual production, industry experts said Monday.

Smelters in China's fourth-biggest producing region were asked in November by China Southern Power Grid to curb operations because of lower dry-season hydropower supply.

On Saturday, the grid operator notified producers that 800,000 kilowatt-hours (kWh) of additional power had been allocated to the aluminium industry, a Yunnan producer said, declining to be named as they are not authorised to speak with media.

Smelters are ramping up operations, the source added.

China Southern Power Grid could not immediately be reached for comment on Monday.

"The latest power reward is likely linked to less power transfer from Yunnan to other provinces," said Su Yanbo, an aluminium analyst at Beijing Aladdiny Zhongying Business Consulting, who expects the increased power availability could restore about 530,000 tons of annual capacity in Yunnan.

Information provider Shanghai Metals Market forecast about 520,000 tons of capacity would be added.

Yunnan typically transfers some of its electrical output to Guangdong province, a southern industrial powerhouse.

Yunnan churned out 4.47 million tons of primary aluminium in 2023, 11% of China's total, Aladdiny data showed.

Hit by drought and low water levels, Yunnan in 2022 started asking aluminium producers to cut output, sparking supply jitters in the world's top producer, as well as price volatility globally.

(Reporting by Siyi Liu and Mei Mei Chu; Additional reporting by Beijing Newsroom; Editing by Tony Munroe and Gerry Doyle)