Copper futures have closed slightly higher on the London Metal Exchange (LME), although gains were capped by concerns over liquidity conditions in China.
At the PM kerb close on Tuesday, LME three-month copper was up 0.3 per cent at $US7,190 a metric ton.
Copper prices initially fell on Tuesday, after fears over China's demand for the metal resurfaced following a move by the People's Bank of China to soak up liquidity in the country's financial system.
The People's Bank of China conducted repurchase agreements to lock up cash in Tuesday's open market operations -- for the first time in eight months -- draining money that had flowed back into the financial system after the Lunar New Year.
The news dented copper prices amid concern the move would hit demand for the metal in the country, which is the world's top consumer of metals, accounting for about 40 per cent of global copper demand.
Base metal prices edged higher in afternoon European trade, however, helped by a weaker US dollar, said analysts.
"We should see a generally firmer tone in most commodity markets over the short-term, as softer US macro data should keep the dollar under pressure and provide further support for the group," said INTL FCStone analyst Edward Meir.
