Shanghai Futures Exchange copper ended up 0.6 percent at 37,570 yuan ($5,762) on Wednesday, still holding above its 200-day moving average at 38,238. Shanghai copper stocks have doubled since the start of the year to sit at record highs of 350,000 tonnes as a steep selloff in LME copper prices to six-year lows fuelled a wave of imports.
Copper steadied on Wednesday as China's annual meeting of parliament ended much as it began, with a stream of assurances by Premier Li Keqiang that the economy was facing difficulties but not in danger of a hard landing, fanning hopes its slow revival may gain steam.
"This rally we've had across commodities and stocks in risk appetite ... a lot of it is on a hope you have China strengthening this year," said Daniel Morgan at UBS in Sydney, adding that prices may have overshot fundamentals.
"That may come through but what we're seeing in the physical trade right now is that there are no signs of anxiety in securing supply."
But optimism was contained with the dollar firm ahead of the outcome of the US central bank meeting. US Fed policymakers are expected to leave short-term interest rates unchanged at a two-day policy meeting that began Tuesday, but also to signal that a rate hike is not too far off. Meanwhile, manufacturers are abandoning copper for its lighter and cheaper rival aluminium after a decade of technological innovation that is saving some companies hundreds of millions of dollars.
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