In an effort to bolster its housing market, the People's Bank of China (PBOC) said in a statement on Tuesday that banks must provide loans to first-home buyers, the first clear call from Beijing to support mortgage lending since starting a policy tightening cycle to calm that market two years ago. The statement encouraged copper bulls, who up until this point had all but written off a Chinese demand revival following its Lunar New Year given stronger international prices and abundant domestic stockpiles. "This might pull forward demand. We've heard nothing but when it comes to their usage of copper for the last two months. This could be the catalyst to push us higher ... above the $3.90 level," said Sean McGillivray, vice president and head of asset allocation for Great Pacific Wealth Management in Oregon. Positive technical momentum, early strength in the euro versus the dollar, and optimism Greece will be able to secure a bailout package and avoid a disorderly default provided further support, analysts said. London Metal Exchange (LME) benchmark copper firmed $99 or about 1.2 percent to close at $8,640 a tonne. In New York, the key March COMEX contract settled up 3.35 cents at $3.9095 per lb, after dealing between $3.8535 and $3.9350. Veteran trader Dennis Gartman said that after a recent phase of consolidation between $3.78 and $3.90 per lb, copper's push and hold above the $3.90 level could set the stage for an upside objective toward $4.25 to $4.30 per lb in the months ahead. Volumes raced higher to close in on 72,000 lots in late New York business, up more than 45 percent from the 30-day average, according to preliminary Thomson Reuters data. Copper has rallied almost 12 percent so far this year to near a four-month high of $8,679.50 in London and $3.9380 in New York, both hit on Jan. 27. Base metal investors continued to monitor European headlines, awaiting the outcome of yet another meeting of Greek political leaders on painful reforms tied to Greece's second bailout package. The reforms, subject of marathon negotiations between Greece and its creditors, aim at securing a 130-billion-euro ($172 billion) rescue from the International Monetary Fund and European Union to avoid an unruly default. Markets will also be paying close attention to data out of China for indications on the health of the world's largest copper consumer, which accounted for around 40 percent of refined copper demand last year. China's imports of commodities including crude oil, copper and iron ore likely fell in January as factories shut during the Lunar New Year break, analysts said, cautioning that the outlook for most industrial commodities was bleak. POLICY SHIFT China's focus is expected to shift from anti-inflationary policies to pro-growth policies this year, a move that would boost demand from industrial metals. "Some of the economic slowdown in 2011 was deliberate," Natixis head of research Nic Brown said, speaking at a metals risk conference in London. "As inflation is peaking we should see a fundamental shift of the developed world towards pro-growth policies." In the medium term, copper prices will be supported by continued supply tightness, which will be felt even more strongly this year as a destocking phase in China should come to an end, analysts at the conference said. "Copper destocking from China's unreported warehouses last year could have been as much as 900,000 tonnes," Brown said. "If you take the destocking element away even a more moderate growth will feel much stronger." Natixis forecasts copper will be in a 270,000- to 280,000-tonne deficit this year as miners struggle to produce enough red metal to meet demand, amid falling copper grades and strike actions disrupting operations.