Aluminium climbs on lower stocks, improving China demand

Aluminium outperformed its peers on Thursday as lower inventories and signs of improving demand in top consumer China bolstered sentiment.

The most-traded aluminium contract on the Shanghai Futures Exchange rose 0.49% at 20,620 yuan ($2,872.83) per metric ton.

Benchmark three-month aluminium on the London Metal Exchange was little changed at $2,575 a ton, as of 0700 GMT.

"Spot (aluminium) demand has shown signs of improvement; that coupled with destocking of some products supported prices," a Shanghai-based aluminium analyst said on condition of anonymity as he is not authorised to speak to media.

The earlier pull-back had sparked growing buying interest in the spot market, limiting the downside room of prices, analysts at broker Guosen Futures said on Thursday.

Aluminium prices had slid for three straight sessions this week after the United States

widened

the 50% import tariff to include products made from the metal.

Also, lower aluminium stocks will support Shanghai prices in the face of any potential downside risks, analysts at broker Galaxy Futures said in a note on Thursday.

Higher global supply, however, capped further price gains.

Global primary aluminium output in July rose 2.5% year-on-year to 6.373 million tonnes, data from the International Aluminium Institute (IAI) showed on Wednesday.

Meanwhile, investors are closely watching for cues from U.S. Federal Reserve Chair Jerome Powell's speech on Friday for a test of bets on a rate cut.

A weaker U.S. currency could help boost demand for dollar-priced metals.

SHFE copper inched down 0.05%, nickel slid 0.33% and tin shed 0.73% while zinc advanced 0.16%, lead gained 0.09%.

LME metals lost ground. Copper shed 0.26%, nickel inched down 0.25%, lead lost 0.58%, zinc dropped 0.43% and tin nudged down 0.07%.