Base Metals Likely to Trade Rangebound

NEW YORK (TheStreet) -- Base metals were flat Tuesday and are likely to trade rangebound ahead of the Federal Reserve meeting and on housing data expected to show weak growth and modest changes in building permits.

On Tuesday, housing starts for August are likely to come in at 550,000, ahead of the earlier month's reading of 546,000. Building permits for August are estimated at 560,000, up marginally from 559,000 recorded in July. The Fed is expected to keep rates steady at 0.25% when it meets Tuesday afternoon.

Copper

Copper for three-month delivery inched up 0.6% to $7,760 per tonne on the London Metal Exchange Tuesday, buoyed by investor confidence and market optimism mainly driven by news that the U.S. recession had ended in June 2009. Inventories narrowed 1,700 tonnes to 382,500 tonnes. The metal finds support and resistance at $7,663 and $7,790, respectively.

According to China Customs, the country's refined copper imports for August climbed 19% from July and 22% from a year ago to 267,153 tonnes.

Freeport-McMoRan Copper & Gold(FCX) has agreed to purchase $500 million of preferred stock of McMoRan Exploration(MMR). The investment is in connection with MMR's proposed oil and gas property acquisition from Plains Exploration & Production(PXP).

Southern Copper(SCCO), which closed at $33.59 on Monday, finds support at $33.20 and faces resistance at $33.81. Freeport-McMoRan Copper & Gold closed at $83.35 with support and resistance at $82.22 and $84.12, respectively. Teck Resources(TCK) closed at $38.00 with support at $37.29 and resistance at $38.79.

Aluminum

Aluminum for three-month delivery remained relatively flat at $2,194 per tonne. LME stockpiles shed 5,050 tonnes to close at 4.39 million tonnes. The metal finds support at $2,180 and faces resistance at $2,223.

China's primary aluminum imports during August plunged 92% to 9,610 tonnes from the same period a year ago.

Alcoa(AA) closed trading at $11.38 Monday, finding support and resistance at $11.20 and $11.50, respectively. Century Aluminum(CENX) closed at $11.70 with support at $11.20 and resistance at $11.97. Kaiser Aluminum(KALU) closed at $41.47 finding support at $40.92 and resistance at $41.91.

Nickel

Nickel for three-month delivery was at $23,055 per tonne on the LME. Inventories declined 168 tonnes to 119,244 tonnes. The metal finds support and resistance at $22,893 and $23,397, respectively.

China's nickel, including alloy imports during August, were down 20% to 18,227 tonnes from the year-ago period, according to Chinese Customs data.

Zinc

After rallying for two days, zinc for delivery within three months was down 0.9% to $2,160 per tonne. Stockpiles reduced by 625 tonnes to close at 618,500 tonnes. The metal finds support and resistance at $2,150 and $2,204, respectively.