SINGAPORE: Shanghai copper traded flat on Tuesday as investors treaded water in a thinly traded market on Christmas, with the focus on US budget talks and worries that fiscal retrenchment could damage the economy.
The talks in Washington to avert $600 billion in automatic tax hikes and spending cuts in the new year stalled last week as House of Representatives Speaker John Boehner was unable to gain support for a tax plan. Over the weekend, some lawmakers voiced concern that the country would go over the "fiscal cliff" when the calendar turns.
The most-traded March copper contract on the Shanghai Futures Exchange was little changed at 56,870 yuan ($9,100) a tonne by 0215 GMT.
The London Metal Exchange is closed on Tuesday and Wednesday for the Christmas holiday.
"With the absence of major economic data and traders from the global market, the market will probably stay put and watch what will happen to the 'fiscal cliff' talks when the deadline draws near," said Fang Junfeng, an analyst at Shanghai CIFCO Futures.
Fang said copper could get a short-term lift when liquidity in the market improves in the near year, but the longer-term outlook was less certain.
Beijing has said that it will maintain controls over the real estate sector next year, while pledging to ensure stable economic growth.
"As long as the property market is sluggish, it is difficult for copper consumption to make a step up," said a trader based in the eastern Chinese city of Ningbo.
China, the world's biggest copper user, consumes about 40 percent of the industrial metal.
LME copper stocks continued to climb on Dec. 21, up 4,950 tonnes at 312,400 tonnes, the highest level in more than 10 months.
Center>Copyright Reuters, 2012
Comments
Comments are closed.