METALS-Copper extends rise after Fed rate cut; profit-booking caps gains

BEIJING, Dec 11 (Reuters) - Copper prices traded higher for a second straight session on Thursday after the U.S. Federal Reserve cut interest rates, though some of the early gains were trimmed by profit-booking triggered by caution over demand outlook.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 closed daytime trade 0.57% higher at 92,180 yuan ($13,059.25) per metric ton. It touched an intraday high of 93,000 yuan, near the record 93,300 yuan hit on December 8.

The benchmark three-month copper CMCU3 on the London Metal Exchange rose 0.36% to $11,598.5 per ton by 0803 GMT after hitting an intraday high of $11,727.5, approaching its all-time high of $11,771 reached on Monday.

The Fed trimmed policy rate by 25 basis points on Wednesday, widely in line with expectations.

The central bank said it would start buying short-dated government bonds from Friday to help manage market liquidity levels to ensure it 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.

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

However, price gains narrowed as concerns over demand prospects resurfaced after AI cloud firm Oracle ORCL.N missed quarterly revenue estimates, a sign that corporate spending on its cloud services may be cooling amid broader concerns of a bubble in the artificial intelligence market.

"It challenged the AI narrative... if AI prospects collapse, the upstream raw materials will also take a hit," a Beijing-based trader said on condition of anonymity.

Similarly, aluminium gained as global 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 0.21% and 0.03%, respectively.

SHFE lead SPBcv1 gained 0.7%, tin SSNcv1 jumped 0.73% while nickel SNIcv1 shed 0.92% and zinc SZNcv1 eased 0.24%.

Other LME metals mostly advanced. Lead CMPB3 rose 0.43%, tin CMSN3 climbed 1.03% and zinc CMZN3 firmed 0.18% while nickel CMNI3 dipped 0.29%.

($1 = 7.0586 Chinese yuan)