LONDON: Copper steadied on Wednesday as fears eased about a US budget crisis after lawmakers closed in on a deal to avert expiring tax cuts and spending increases, although uncertainty about the outlook for demand kept prices soft. Republicans tried to squeeze more concessions from the White House on taxes on Tuesday in political manoeuvring for a deal that would prevent the US economy from going over the so-called "fiscal cliff" in the new year. Analysts said physical demand remained sluggish for the metal used in power and construction as the year draws to a close, keeping prices in a tight range. "As we approach the end of the year, there is some book-squaring activity going on, and people have been taking profits. so copper has drifted lower," Andrey Kryuchenkov, an analyst at VTB, said. "There is a good chance that we could see a last-minute deal in the US to avert a fiscal cliff. Provided that goes ahead, it would be good for the base metals market. However for the gains to be sustained for the likes of copper, we need to see more evidence of improvement in spot demand." Three-month copper on the London Metal Exchange (LME) traded at $8,013.25 a tonne at 1052 GMT. It was untraded at the close on Tuesday but was bid at $8,024 a tonne. Since a price rally of almost 8 percent from mid-November to a near two-month high on Dec. 12, momentum has begun to fade, with traders cutting risk and squaring positions ahead of year-end. The metal is up more than 5 percent for the year. "With market participants closing their books ahead of year-end, we wouldn't really expect too big a change, especially in the industrial metals space, where it seems there is a consolidation going on from the recent shift higher," Stefan Graber, an analyst at Credit Suisse, said.

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