SINGAPORE: London copper edged lower in thin trading on Wednesday as activity winds down ahead of the end of the quarter and investors exercised caution amid the ongoing crises in the Middle East and Japan.
Concerns on demand from top copper buyer China linger, as high stockpiles are likely to curb buying from China for the time being.
"There is nothing exciting in the market," said a Shanghai-based trader, "Unless we see heavyweight news, trading will remain thin in the next couple of days as the first quarter comes to an end."
Three-month copper on the London Metal Exchange inched down 0.3 percent to $9,561 a tonne by 0333 GMT. Shanghai's most-active copper futures contract gained 0.6 percent to 71,260 yuan.
"Market participants are still worried that Beijing will further tighten up its monetary policy," said Zhou Jie, an analyst at Shanghai CIFCO Futures.
Central banks in developed economies, including the euro zone and United States, are expected to turn hawkish as economic recovery appeared to be firmly underway.
Investors are watching the European Central Bank, which is expected to raise interest rates next month, just as a number of US Federal Reserve officials said that the central bank is unlikely to extend its $600 billion bond-buying programme.
NO QE3
"The easy monetary policy has certainly been supportive of metals, but the market has essentially priced in that there will be no QE3 (third round of quantitative easing)," said a Sydney-based trader.
"If there were an unexpected withdrawal before June, that might be an issue. It there is still an accommodative fiscal policy, that will continue to be supportive."
Technical charts showed LME copper may rise to $10,800 a tonne over the next three months, said Reuters market analyst Wang Tao.
The market will likely remain cautious over the ongoing turmoil in the Middle East and North Africa, while watching the nuclear crisis in Japan unfold.
France and the United States will help Japan in its effort to contain radiation from a quake-stricken nuclear plant, as the seawater around the plant has become radioactive.
LME lead slipped 0.4 percent to $2,675 a tonne, with the cash to three-month spread rising to $44 in backwardation on Tuesday, its highest since early February.
Data showed that two dominant position holders control at least 70 percent of LME's lead stocks.
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