NEW YORK (TheStreet) -- Base metals were trading modestly higher early Tuesday and are likely to gain throughout the day on positive economic data and optimism over an economic recovery.
China is expected to spend close to $4.48 billion over the upcoming five years on mineral exploration in order to cut its reliance on mineral products imports, Xinhua reports, citing a China resources official. According to the source, imports of copper ore, iron ore, and sylvite could account for less than 75%, 50%, and 60%, respectively of China's total mineral consumption over the next five years.
September wholesale inventories in the U.S. are due for release Tuesday with a market estimation of a rise of 0.6%, compared to 0.8% recorded in August.
Copper
Copper for three-month delivery rallied 0.9% to $8,735 per metric tonne on the London Metal Exchange amid speculation that the Federal Reserve's plan to buy an additional $600 billion in Treasuries through June will boost economic growth. Inventories reversed the previous day's trend and shed 1,150 tonnes to touch 52-week lows of 365,200 tonnes.
Global copper output growth is lagging demand. Some of the world's top copper miners reported an average production increase of 4% in the third quarter, representing only one-tenth of the global mined production, as per a Reuters analysis based on corporate third-quarter earnings. Looking ahead, demand from China and other emerging markets is seen outpacing supply.
Southern Copper(SCCO_) closed at $46.49 on Monday, finding support at $45.71 and resistance at $46.88. Freeport-McMoRan Copper & Gold(FCX_) closed at $105.28, with support and resistance at $103.76 and $106.26, respectively. Teck Resources(TCK_) closed at $50.15, with support at $49.23 and resistance at $50.73.
Aluminum
Aluminum for three-month delivery edged up 0.4% to $2,439 per tonne. Inventories were down 2,825 tonnes to 4.28 million tonnes, hitting new 52-week lows.
China sold all its aluminum ingots it offered from state reserves below the prevailing market price, Bloomberg reports, citing China's National Development and Reform Commission. The sales are an effort to ease shortages, curb price gains, and control prices following the curbs on power supplies in light of energy saving targets.
Alcoa(AA_) closed trading at $13.96 Monday, finding support and resistance at $13.80 and $14.05, respectively. Century Aluminum(CENX_) closed at $14.65, with support at $14.47 and resistance at $14.77. Kaiser Aluminum(KALU_) closed at $46.89, finding support at $46.33 and resistance at $47.32.
Nickel for three-month delivery gained 0.5% to $24,251 per tonne. Inventories added 114 tonnes to close at 129,216 tonnes.
Zinc
Zinc for three-month delivery rose 1.6% to $2,520 per tonne. Inventories inched up marginally to 633,250 tonnes from the prior close of 633,200 tonnes.
Lead
Lead for three-month delivery gained 1.2% to $2,535 per tonne. Lead inventories narrowed 350 tonnes to 202,875 tonnes, retreating from 52-week highs.
Silvercorp Metals(SVM) announced a share purchase agreement and a Sino-Foreign cooperative joint venture contract to acquire a 70% equity interest in China-based Yunxiang Mining for $33 million, RTT News reports. Yunxiang's primary asset is a BYP gold-lead-zinc mine.
