Base Metals Rise; Copper Gains 0.6%

NEW YORK （TheStreet） -- Base metals were trading relatively higher early Monday, and the uptrend is likely to continue through the day with mounting pressure on the dollar index.

Copper

For the fifth consecutive day, copper for three-month delivery increased. It was up 0.6% Monday to $8,780 per metric tonne on the London Metal Exchange on concerns that supply may fall short of demand as inventories continuously hover around 52-week lows. Additionally, the possibility the Federal Reserve could take more steps to boost U.S. economic growth may push prices. Recovering from its 52-week lows, inventories surged 1,200 tonnes to close at 353,625 tonnes. The metal faces support at $8,667 and resistance at $8,791.

Southern Copper（SCCO） closed at $44.46 Friday, finding support at $43.74 and resistance at $44.84. Freeport-McMoRan Copper & Gold（FCX） closed at $108.95, with support and resistance at $107.40 and $109.96, respectively. Teck Resources （TCK） closed at $54.73, with support at $53.84 and resistance at $55.25.

Aluminum

Aluminum for three-month delivery rose 1.2% to $2,346 per tonne. Inventories added 1,200 tonnes to close at 4.29 million tonnes. The metal faces support and resistance at $2,294 and $2,365, respectively.

The national power grid in China will push aluminum demand higher as the metal is used in power cables and semiconductors as transformers, Bloomberg reported, citing Macquarie Group. From the existing 2 million tonnes of demand in China, the figure is likely to increase by 500,000 to 1 million tonnes by 2011.

Alcoa（AA） closed at $14.23 Friday, finding support and resistance at $13.99 and $14.36, respectively. Century Aluminum（CENX） closed at $15.06, with support at $14.78 and resistance at $15.32. Kaiser Aluminum（KALU） closed at $50.00, finding support at $49.61 and resistance at $50.37.

Nickel

Nickel for three-month delivery gained 0.6% to $23,650 per tonne. Inventories accumulated 120 tonnes to 130,908 tonnes. Nickel has support at $23,410 and resistance at $23,860.

Zinc

Zinc for three-month delivery was up 0.8% easing to $2,237 per tonne. Inventories narrowed 225 tonnes to 633,650 tonnes. The metal faces support and resistance at $2,200 and $2,253, respectively.