Aluminium extends gains on prospects of stronger China demand

Aluminium prices rose on Friday for a second straight session, helped by prospects of improving demand in top consumer China, while investors remained focussed on U.S. Federal Reserve Chair Jerome Powell's speech later in the day for policy outlook.

The most-traded aluminium contract on the Shanghai Futures Exchange added 0.07% to 20,650 yuan ($2,876.08) per metric ton.

The contract touched the highest since August 15 at 20,730 yuan a ton earlier in the session.

Benchmark three-month aluminium on the London Metal Exchange rose 0.15% to $2,589 a ton, after hitting the highest since August 18 at $2,595 earlier.

The anticipation for demand seasonally picking up next month may have boosted aluminium prices, analysts at broker Guosen Futures said on Friday. Earlier in the week, efforts to push an end to the war in Ukraine had ignited expectations of increasing supply from Russia, which had weighed on aluminium prices.

But a peace deal between Ukraine and Russia remained elusive.

"The aluminium market is expected to tighten in 2026, as supply growth moderates," ANZ analysts said in a note.

In China, the current aluminium output has approached the mandated capacity cap, leaving limited space for further production growth.

The base metals complex traded in a narrow range with focus on the Fed's annual symposium in Jackson Hole and Powell's speech on Friday for U.S. monetary policy clues.

LME copper shed 0.13%, nickel nudged up 0.07%, lead edged up 0.23%, tin ticked 0.16% higher and zinc advanced 0.45%.

SHFE copper rose 0.11%, lead edged up 0.12% while nickel fell 0.51%, tin slid 0.64%, and zinc dipped 0.07%.