An improving property sector, a pillar of China's economic growth, will boost demand for copper and other base metals in the country, the world's top consumer of many raw materials. "The market is focusing on the recovery of China's economy," said Liu Xu, an analyst at China International Futures in the southern city of Shenzhen. "The market will still warm up even if the government maintains its current policy pressure, and we don't expect more severe crackdown measures."
China's housing ministry reiterated its stance of extending control over the property market in 2013 to curb speculative buying, after data showed a pickup in housing sales as well as higher prices in recent months. The most-traded April copper contract on the Shanghai Futures Exchange closed nearly flat at 57,160 yuan ($9,200) a tonne, easing from a one-week high of 57,280 yuan hit earlier in the day.
Trading volume on copper contracts eased to 180,312 lots from Tuesday's 305,798 lots, according to preliminary exchange data, making Wednesday the quietest trading session since August 2011. Market activities taper off towards the year end as traders square books to book profits for the year. The London Metal Exchange remained closed on Wednesday for Christmas holidays.
Investors will watch the progress in US talks to avert the "fiscal cliff", $600 billion worth of tax hikes and spending cuts to take effect in the new year, after the Christmas break for the lawmakers and President Barack Obama, who is cutting short his Christmas holiday. The next session of the Senate is set for Thursday, and the House of Representatives could also be summoned that day. In industry news, US regulators have delayed by two months a ruling on BlackRock Inc's plan to launch a copper exchange-traded fund backed by physical metal, a week after giving the go-ahead to a similar product proposed by J.P. Morgan Chase & Co.