Shanghai copper futures were mostly flat on Friday, as the market sought direction amid speculation that China may ease liquidity to juice up the economy, although sluggish demand and ample stocks continued to weigh.
Analysts said prices were expected to consolidate next week, as traders weigh the bearish fundamentals at home against more upbeat US data and growing positive sentiment about world markets in 2015. The most-traded March copper contract on the Shanghai Futures Exchange inched up 0.02 percent to 45,510 yuan a tonne by 0700 GMT, bringing total losses year-to-date to about 7.4 percent. The London Metal Exchange is closed for Christmas and Boxing Day.
"The underlying market is weak given the recent large imports, strong production and weak demand but hopes of more policies to boost the economy are propping up prices," said Yan Duanhong, an analyst at Jinrui Futures.
Local media re-circulated reports that the Chinese central bank plans to temporarily waive a requirement for banks to set aside reserves for some deposits, aiming to boost lending amid a slowdown of the world's second-largest economy.
Traders said spot activity was also lacking this week as liquidity tends to be tight in China during year end, as companies seek cash to repay expiring loans and banks need extra funds to meet minimum deposit requirements. Separately, the dollar extended its fall from the nearly nine-year high against a basket of major currencies touched earlier in the week. The dollar index, which tracks the greenback versus a basket of six currencies, was down 0.13 percent at 89.85.
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