The aluminum industry has struggled for two years since the recession, but demand and prices have started to rise and one of the metal's biggest producers, Alcoa Inc , is poised to start growing in profitability, analysts say.

After small profits in recent quarters, Wall Street expects Alcoa to post healthier results when it kicks off the U.S. earnings season on Monday.

Analysts on average expect Alcoa to post a fourth-quarter profit of 19 cents a share, up from 1 cent a share a year earlier, according to Thomson Reuters I/B/E/S. Revenue is seen rising to $5.68 billion from $5.43 billion. (For StarMine comparative valuations see )

When people look at Alcoa, they usually look at the price of the metal, said analyst Bridget Freas of Morningstar Inc.

But the company has been doing a lot of things under the radar -- lots of cost-cutting, and they have cleaned out their downstream businesses, she said. They are positioned for a strong year.

Earlier on Friday, Alcoa said it would restart three idled aluminum smelters in the United States in the first half of 2011, raising its output to meet growing global demand for the metal.

The restarted facilities will increase Alcoa`s aluminum production by 137,000 metric tons over the course of 2011 and by 200,000 metric tons on an annual basis thereafter.

Deutsche Bank analyst Jorge Beristain said Alcoa has turned the corner from an operational point of view. He upgraded his investment rating and raised his share-price target on an expected increase in aluminum prices.

Lloyd O'Carroll of Davenport & Co raised his 2011 and 2012 earnings estimates for the company. Higher prices are expected as industry fundamentals are improving, he wrote in a research note.

Aluminum prices, which slumped dramatically during the recession, rose 11 percent last year -- 5 percent in the fourth quarter alone -- and are now near a two-year peak of $2,500 per tonne.

Demand for aluminum, used to make automobiles and aircraft as well as beverage cans, is picking up after a sluggish couple of years, analysts said.

Alcoa's laggard status has piqued investor interest in the name as a possible comeback play for 2011 and given signs of operational stability. We don't disagree, Deutsche Bank's Beristain wrote.

Bill Selesky, an analyst with Argus Research, also raised his 2011 earnings estimate for Alcoa, based on our expectations for continued strong aluminum demand growth next year.

In a research note, Selesky said, We believe that continued global economic recovery, together with improved pricing and a substantially lower cost structure, will enable Alcoa to post strong earnings in the fourth quarter and into 2011.

Charles Bradford of Affiliated Research Group said Alcoa's results traditionally lag behind big changes in aluminum prices. So the first quarter (2011) should be pretty decent, he said.

Management has done a good job of cost cutting, but one negative is the weak dollar, which drives up costs in other countries (where Alcoa operates), he said.

But overall Bradford was bullish. Demand will improve, although it has been gradual, he said. But people are raising their economic forecasts and the outlook does look better.

(Reporting by Steve James; Editing by Bernard Orr and Steve Orlofsky)