The most-traded copper contract on the Shanghai Futures Exchange slipped 0.3 percent to 45,760 yuan ($6,641) a tonne on Wednesday after overnight gains on signs of rising US inflation and further depreciation in the yuan. Data on Tuesday showed US home resales rose in October to their highest level in more than 9-1/2 years, helping to support the greenback.
Copper is seen as a cheaper hedge against inflation than precious metals, while holding stronger upside potential.
However, traders at Argonaut Securities warned on Wednesday that while copper inventories on the London Metal Exchange continued to slide, down to an 11-week low, providing a positive fundamental outlook, SHFE inventories are up around 30 percent since early November.
"We think the increase in exchange inventory on the SHFE reflected an increase in imports as well as increase in refined copper production," Argonaut said in a note.
"While copper prices may continue to be buoyed by positive sentiments on demand outlook, there will be room for price consolidation on risks of stimulus policies delay/adjustments in United States or in China," it said.
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