BEIJING, March 22 (Reuters) - Copper prices extended gains on Wednesday as fears over a banking turmoil abated, while the market awaited a decision on interest rates by the U.S. Federal Reserve due later in the day.
Three-month copper on the London Metal Exchange was up 0.3% to $8,784 a tonne by 0152 GMT, having increased for a third session this week.
Prices recovered this week from a two-month low hit last Wednesday due to a large sell-off over a banking crisis, as regulators moved to rescue First Republic Bank and European lender Credit Suisse.
The Fed began a two-day meeting from Tuesday, and investors are divided about whether the central bank will raise interest rates by 25 basis points on Wednesday or place a pause on hikes for the month.
The dollar index was little changed at 103.20 on Wednesday, having slid from a four-month high at 105.64 earlier this month. A weaker dollar makes it more attractive for non-dollar holders to buy the greenback-priced commodity.
LME aluminium added 0.3% to $2,273 a tonne, zinc dipped 0.1% to $2,863 and lead gained 0.5% to $2,104, while tin was down 0.1% to $23,010.
Markets were also aided by firm fundamentals as demand from top consumer China improved, against the backdrop of constrained supply.
The most-traded May copper contract on the Shanghai Futures Exchange inched up 1% to 68,040 yuan ($9,892.99) a tonne.
SHFE aluminium edged up 0.1% to 18,195 yuan a tonne, nickel eased 0.5% to 173,950 yuan, zinc fell 0.8% to 22,355 yuan, lead dipped 0.1% to 15,340 yuan and tin rose 0.6% at 186,670 yuan.
Chinese spot treatment charges for zinc concentrate slipped from their highest in more than two years in March, and will likely fall further on high smelter utilisation rates and a demand recovery in its biggest consuming market.
For the top stories in metals and other news, click or
($1 = 6.8776 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Varun H K)
