Copper futures on the London Metal Exchange were steady in Asian trade on Tuesday as speculative Chinese selling was largely offset by buying from financial institutions, traders said. The key three-month copper contract on the London Metal Exchange was trading at $3,238/$3,245 a tonne, just off the London close of $3,245. "Banks bought it at higher levels and pushed it up to around $3,245, but it's since drifted off as they might have backed off," a Hong Kong-based trader said by phone.
Support is seen initially at $3,170 and then $3,130/$3,140, with falls down to $3,000 and below if it punches through, traders said.
"At the moment, the way the funds keep coming in, I don't think it's going to break through, unless they flip and start selling," the trader said.
On the upside, traders see resistance at $3,270 with a sustained break above that level accelerating the pace towards $3,300 and possibly $3,350, according to a market forecast from a Singapore-based trader.
Last on Monday, futures of the red metal rose to a 16-year high of $3,270 a tonne, just below an all-time high of $3,280 set in January 1989.
Traders said market fundamentals were strong, underpinned by high demand from China, which could continue to push copper prices up, although they did not rule out a technical correction.
"The consumers don't want to pay at these numbers and if the macro funds start unwinding some of their short dollar positions, they are going to sell off their commodities," the Hong Kong trader said.
Shanghai copper futures were mixed on Tuesday, with the most active may contract flat at 30,800 yuan (US $3,720) a tonne.
Aluminium futures in Shanghai were also mixed with the May contract shedding 30 yuan to trade at 16,570 a tonne.
Other LME metals moved little, with the three-month aluminium contract trading at $1,952/$1,957 a tonne, from a close of $1,958 on Monday.
Zinc was trading at $1,406/$1,411 a tonne, versus $1,410 on Monday.
Nickel was at $15,950/$16,150 a tonne versus $16,100. Lead was flat at $975/$980 a tonne and tin was at $8,400/$8,500 a tonne.