Shanghai copper futures rose on Wednesday on tight domestic spot supply, while the Fed's interest rate hike was largely within expectations and did not affect trade significantly, traders said.
Shanghai's most active contract, November, rose 120 yuan to 26,020 yuan ($3,143) a tonne, while other contracts ended from unchanged to 330 yuan higher. Combined volume expanded to active 208,346 lots from Tuesday's slack 181,730 lots.
Backwardation whereby prices of distant futures are lower than those of nearby contracts has grown more pronounced in past sessions as Shanghai copper stocks remain low, traders said.
"The Fed's interest rate decision hardly had any impact today as a rise of 25 basis points had already been factored in," the trader said.
The US Federal Open Market Committee on Tuesday raised interest rates another quarter of a percentage point to stave off potential inflation, saying the US economy had been hit by energy costs, but was poised for faster growth.
LME three-month copper was quoted at $2,738/$2,743 on Wednesday's Asian trade, extending gains on Chinese demand after gaining $16 to $2,736 a tonne on Tuesday, traders said.
Spot copper in Shanghai rose 420-500 yuan to move in a range of 29,150-29,220 yuan a tonne on Wednesday. Shanghai aluminium contracts bucked the copper trend to fall 30 yuan to 190 yuan, with volume declining to 18,974 lots from Tuesday's 20,866 lots. LME aluminium was up $21 to $1,686 on Tuesday.
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