METALS-Copper climbs more than 1% after Fed lowers rates

BEIJING, Dec 11 (Reuters) - Copper outperformed its base metal peers with a price gain of more than 1% on Thursday, supported by a softer dollar after the U.S. Federal Reserve cut interest rates.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 climbed 1.17% to 92,730 yuan ($13,133.07) per metric ton by 0203 GMT, trading close to the record high of 93,300 yuan hit on December 8.

Benchmark three-month copper CMCU3 on the London Metal Exchange advanced 1.33% to $11,710 per ton. It hit an all-time high of $11,771 on December 8.

The dollar =USD eased after the Fed trimmed policy rate by a quarter of a percentage point on Wednesday, widely in line with expectations.

A softer U.S. currency makes dollar-priced commodities cheaper for buyers using other currencies.

The Fed also said it would start buying short-dated government bonds from Friday to help manage market liquidity levels to ensure the central bank retains firm control over its interest rate target system.

"It's not just the rate cut, but the Fed's stance of balance sheet expansion that bolstered copper prices," said Xiao Jing, a Beijing-based analyst at broker SDIC Futures.

"Investors will continue to digest the theme in the short term."

Underpinning prices was also lower copper output from Chilean state-run miner Codelco.

Aluminium similarly posted gains as global aluminium producers sought premiums of $190-$203 per ton from Japanese buyers for January-March primary metal shipments, up 121%-136% from the current quarter.

SHFE SAFcv1 and LME CMAL3 benchmarks climbed 0.55% and 0.66%, respectively.

SHFE nickel SNIcv1 nudged down 0.09%, lead SPBcv1 gained 0.7%, tin SSNcv1 jumped 1.14% and zinc SZNcv1 was flat.

Other LME metals broadly gained. Nickel CMNI3 added 0.6%, lead CMPB3 advanced 0.7%, tin CMSN3 climbed 1.11% and zinc CMZN3 rose 0.65%.

($1 = 7.0608 Chinese yuan)