NEW YORK (TheStreet) -- Base metals were lower Tuesday weighed down by a modest recovery in the dollar index and declines in Asian equity markets. But as market fundamentals are strong, buying opportunities likely will cap further declines.
Copper for three-month delivery dropped 0.6% to touch $8,242 per metric tonne on the London Metal Exchange on the prospect of further credit tightening in China. Copper inventories added 475 tonnes to 372,475 tonnes. The red metal finds support at $8,230 and resistance at $8,375.
China has discovered additional copper, bauxite, gold and potash deposits as the country strives to meet the growing demand for natural resources, Bloomberg reports. Explorations uncovered 38.5 million metric tonnes of copper, in addition to the 20 million tonnes discovered early this year.
Southern Copper(SCCO_), which closed at $38.74 on Monday, finds support at $38.42 and faces resistance at $39.08. Freeport-McMoRan Copper & Gold(FCX_) closed at $95.38 with support and resistance at $94.49 and $96.42, respectively. Teck Resources (TCK_) closed at $44.01 with support at $43.47 and resistance at $44.77.
Aluminum
Aluminum for three-month delivery dipped 0.5% to $2,389 per tonne. Inventories shed 4,025 tonnes to 52-week lows of 4.32 million tonnes. The metal finds support at $2,383 and resistance at $2,427.
China's aluminum imports may soar more than 25 times by 2015 with domestic demand increasing 12.9% every year from 2011 to 2015. As demand outpaces output, China's aluminum prices likely will jump more than 10% in 2009, Bloomberg reports, citing a Harbor Intelligence report.
Alcoa(AA_) closed trading at $12.93 Monday, finding support and resistance at $12.81 and $13.07, respectively. Century Aluminum(CENX_) closed at $14.15 with support at $13.93 and resistance at $14.50. Kaiser Aluminum(KALU_) closed at $44.18, finding support at $43.90 and resistance at $44.84.
Nickel
Nickel for three-month delivery shed 0.5% to trade $24,200 per tonne on the LME. Inventories grew by 252 tonnes to 123,474 tonnes. The metal faces support at $24,043 and resistance at $24,704.
Norilsk Nickel is planning to buy copper concentrate from the state reserves in the upcoming years to produce 50,000 tonnes of copper annually, Steelguru reports. The purchase and repayment details will be finalized by the end of 2010.
Zinc
Zinc for three-month delivery fell 0.3% to touch $2,324 per tonne. The drawdown in inventories was 875 tonnes at 610,850 tonnes. The metal finds support at $2,294 and resistance at $2,359.
