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Shanghai bourse plans alumina futures draft in commodities derivatives push

* Plan comes as alumina prices rally

* China has cracked down on alumina refiners amid smog battle

* ShFE may also launch aluminium alloy futures

* Contract would compete with CME product (Adds details, comments throughout)

By Tom Daly

SHANGHAI, Sept 20 (Reuters) - The Shanghai Futures Exchange (ShFE) aims to release a draft of an alumina futures contract in late 2018 or early 2019, after requests from the market to create a price benchmark for the feedstock used to make aluminium, an official said on Thursday.

"We believe that by the end of this year or by the beginning of next year we will release a draft for discussion in public," Zhang Zhiyong, the head of ShFE's non-ferrous metals department, told AZ China's aluminium and raw materials conference in Shanghai.

China's major commodity exchanges have been rushing to launch futures contracts on a range of products - from dates to electricity - in recent years as they move to tap investor risk appetite and offer the country's vast industrial sector ways to protect revenue.

On Friday, the ShFE will launch copper options and is considering opening its flagship copper futures to foreign investors, a major step in the nation's effort to develop its derivatives industry.

The ShFE already offers aluminium futures and China is the world's top producer and consumer of the metal used in cars and aeroplanes.

A Chinese alumina contract would compete with the product run by U.S. rival CME Group, allowing alumina refiners and aluminium smelters to better protect their exposure to fluctuating prices.

"My colleagues are working on it because alumina (prices) have witnessed some fluctuations over the past couple of years, so we had some calls from the market to launch the new futures," Zhang said.

Alumina prices on a free-on-board basis from Australia have risen by almost 50 percent so far this year amid an outage at Norsk Hydro's Alunorte refinery in Brazil, U.S. sanctions on Russia's Rusal and a strike at Alcoa's operations in Western Australia.

In China, alumina prices have soared as Beijing's crackdown on heavy industry has shuttered some refiners, tightening supplies.

Zhang said the ShFE first started to pay attention to alumina futures in 2013 and this year began testing alumina storage.

He said it can take a "long time" to launch a contract in China.

The bourse is also looking at aluminium alloy futures, but it will not be in the short term, while stainless steel futures could be rolled out in the next one to two years, he said. (Reporting by Tom Daly; Editing by Christian Schmollinger and Josephine Mason)