Copper extends gains after Fed lowers rates

BEIJING, Dec 11 (Reuters) - Copper prices pared some earlier gains but still traded higher for a second straight session on Thursday, after the U.S. Federal Reserve cut interest rates.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 climbed 0.51% to 92,130 yuan ($13,046.43) per metric ton by 0503 GMT. It touched an intraday high of 93,000 yuan, close to a record high of 93,300 yuan hit on December 8.

The benchmark three-month copper CMCU3 on the London Metal Exchange advanced 0.48% to $11,611.5 per ton after touching an intraday high of $11,727.5, approaching an all-time high of $11,771 on December 8.

The dollar =USD eased after the Fed trimmed policy rate by 25 basis points 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."

Lower copper output from Chilean state-run miner Codelco also underpinned prices.

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 both climbed 0.3%.

SHFE nickel SNIcv1 nudged down 0.09%, lead SPBcv1 gained 0.7%, tin SSNcv1 jumped 0.57% and zinc SZNcv1 eased 0.13%.

Other LME metals mostly gained. Nickel CMNI3 was little changed, lead CMPB3 advanced 0.51%, tin CMSN3 climbed 0.61% and zinc CMZN3 rose 0.11%.

($1 = 7.0617 Chinese yuan)