Base metals mostly dropped during Tuesday London Metal Exchange (LME) open-outcry business, led by fund and technical selling in copper, while lead was lifted by supply worries, traders said. Copper was lower, as it had been throughout the session, breaking support at $2,680 down to $2,660, while most other prices tracked the red metal's movements.
"In copper, there was some technical CTA (Commodity Trade Advisory) selling and some by the macro funds," one said.
Traders noted further selling in metals later in the afternoon after the dollar strengthened against the euro.
The dollar lifted after a strong consumer confidence report in the United States boosted expectations that the Federal Reserve could raise interest rates faster than had been expected.
Copper fluctuated between lows near 2,660 support and highs around $2,700, with the final three months business in the rings settled at $2,664 a tonne, down $50 from Monday's kerb.
Less concern was evident over Grupo Mexico labour disputes, with Cananea mine workers voting to delay a decision to August 10 over striking.
"In the short term, initial support will be around $2,650/620, although key support remains at $2,500," the trader said.
"There could be an upside reaction up to $2,680/90 and then $2,710/730 on consumer buying, but current sentiment suggests a floor has yet to be found."
Aluminium ended at $1,658, down $7.50, keeping an eye on Alcoa developments. The company said union leaders representing workers at its Wenatchee, Washington, aluminium smelter have rejected proposals for a new contract and approximately 400 workers will lose their jobs.
The Wenatchee smelter has been idled since July 2001 and will remain shut.
In other metals, lead was firmer, rising $19 to $895, amid extreme nearby tightness.
Warehouse inventories fell 700 tonnes to 38,225 tonnes, the lowest since August 1990, while the cash/threes backwardation firmed to a record $97.50/102.50.
Zinc drifted back to $983/984, down $5 in quiet trade, while nickel dropped in kerb trading by $455 to $13,645.
"Technical selling saw nickel tank in the kerb and it needs to hold above $13,500 otherwise it will move quickly down to $12,800," the trader said.
Tin was quiet but steady, up $85 to $8,810/820.
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