BEIJING, Jan 17 (Reuters) - Shanghai aluminium prices extended declines into a second session on Wednesday as improving weather conditions smoothed the flow of ingots from China's remote northwestern Xinjiang region to the east of the country. Heavy snowfall in Xinjiang, a key aluminium smelting region, had disrupted transportation this month, leaving ingots stuck in transit. "Even so, the inventory on the market is still growing," said Xu Maili, director of non-ferrous metal reserarch at Everbright Futures in Shanghai. Shanghai aluminium prices are already down 3.9 percent year -to-date, with deliverable Shanghai Futures Exchange (ShFE) aluminium stocks at a record 773,941 tonnes, as of Jan. 12. "As the weather is okay now, transport will get better and people expect to see more ingot deliveries to warehouses," said CRU analyst Jackie Wang. FUNDAMENTALS: * SHANGHAI ALUMINIUM: The most-traded March contract on the ShFE was down 1.8 pct at 14,625 yuan ($2,275.34) a tonne, as of 0452 GMT. Earlier in the session, it touched its lowest since Dec. 20 at 14,560 yuan a tonne. * LONDON ALUMINIUM: Aluminium on the London Metal Exchange (LME) slipped 0.1 percent to $2,188 per tonne, shedding the modest gains it posted since Tuesday's close. * SHFE COPPER: The most-traded ShFE copper contract edged 1.4 percent down to 53,850 yuan a tonne, to its lowest close since Dec. 20, as traders locked in profits ahead of Lunar New Year. * LONDON COPPER: Three-month copper on the London Metal Exchange gained 0.1 percent to $7,082 a tonne, partly recovering from the 1.8 percent fall in the previous session. * POSITIONS: Futures brokerage Gelin Dahua cut its long position on the ShFE April copper contract by 35 percent on Tuesday, according to ShFE data, but remains the top position holder for the month with 7,803 lots. * NICKEL: Shanghai nickel was down 1.9 percent at 97,280 yuan a tonne, poised for its fourth consecutive session of declines, tracking a more than 5 percent slide in London on Tuesday. * INVENTORIES: Stocks of industrial metals in LME warehouses fell more than 40 percent last year and further declines are expected in 2018, which should in theory signal tighter supplies and fuel a blistering price rally. * AUSTRALIA: Mining group South32 Ltd's second-quarter metallurgical coal output dropped 43 percent due to the suspension of operations at its Appin mine in Australia over safety concerns, the company said on Wednesday. * RIO TINTO: Rio Tinto Plc on Tuesday said a U.S. regulator's lawsuit accusing the big Anglo-Australian mining company of fraud for overstating the value of Mozambique coal assets it had bought in 2011 should be dismissed.